We have been using the Semis as a one of several economic signposts, and as an investment/trading destination since the Semi Equipment ‘bookings’ category in the Book-to-Bill ratio began to ramp up several months ago. But those who say that Semiconductors are subject to pricing pressures are correct. It is a segment in which people need to be discrete with their investments. NFTRH 410 updated some details about this market leader.
The title of this segment is actually the subject line of an email sent by subscriber ‘RK’ on Friday, after the post-Payrolls update that included the following statement that RK questioned. From the update…
“Gold is getting clobbered as it should. Let’s please keep it real, because a lot of gold bugs are not going to. The case for gold, silver and commodities rests on an inflationary phase, which strong jobs and wages would indicate out ahead. But for now, the hit to the precious metals is logical.”
The case for commodities (cyclical) always rested on an inflationary phase, but in noting that the same is true for gold it appears that we have deviated from the preferred case for a strong, longer-term precious gold bull; and indeed we have. The point I have been making as the Semiconductor Equipment cycle went positive a few months ago and gold broke down vs. palladium more recently, is that cyclical forces are at work now. That would not be the preferred fundamental environment for gold or gold miners. (more…)
NFTRH 404 deviated from the usual format of widespread, in-depth coverage of US and global markets, precious metals and commodities in order to focus on two main themes. One was a view of building short-term risks in the gold market (possibly pending new rally highs) and the other of a developing bullish phase in the US stock market. We reproduce part of that segment here…
More on the ‘Breadth Thrust’ and Market Internals
Ref. Breadth Thrust: Prelude to a Crash? (July 12)
Subscriber ‘LN’ presented a view of the impending ‘breadth thrust’ signal and we both came to the same conclusion; that this is ending action in the stock market. It is at once very bullish and very bearish, depending on time frames. Below is additional information per ‘LN’, who is a financial adviser and thus, not a casual observer. I would also note that both ‘LN’ and I have similar caveats about analogs from the past projecting to the future (they often do not do it well). But for reference (emphasis mine)…
“I went back and looked at 1987 a little closer. I know the price action isn’t going to be identical but I wanted to see if they rhyme at all. (more…)
I am prompted to write this article because TA’s are starting to pick up on the Semiconductor index’s bullishness and even the overwhelmingly bearish website, the Daily Reckoning is calling bull on the Semiconductor sector.
These Tech Stocks Are Ready to Lead the Market. Before Buying, Read This…
The author uses only charts to clue readers in to this little secret (Semis led the market down and now they are leading it up) but there is much more to the story, and since it has been our story (for its upside and downside market leadership) since 2013 I’ll lay claim before the whole enchilada opens up and every wise guy with a chart or a stock pick is touting the Semis.
Following is the opening segment from the May 29 edition of Notes From the Rabbit Hole, NFTRH 397:
If we are going to highlight improving fundamentals, which we did as gold out performed commodities and stock markets, then we also have to highlight and respect eroding fundamentals; no ifs, ands or buts.
The plain and simple fact is that the Semiconductor Equipment sector is firming, with the April Book-to-Bill (b2b) joining Applied Materials’ quarterly report noted in NFTRH 396’s opening segment as another bullish [economic] indicator. Semi Equipment was a leader to the general Semi sector in early 2013, which in turn led the economy and job creation. Our fundamental gold view improved in January 2016 as gold launched upward vs. global stock markets, joining its positive status vs. commodities.
The following is the opening segment of this week’s Notes From the Rabbit Hole, NFTRH 396. The report also covers, in detail, the technical status of US/Global stock markets, precious metals, commodities, currencies and even a few individual gold miners and a couple of new (non-gold related) NFTRH+ trade ideas.
In January of 2013 we noted that the “Canary’s Canary” chirped and signaled an economic up phase (such as it was) on the horizon. The Canary was the Semiconductor sector, which is cyclical and economically sensitive. The Canary’s Canary is the Semi Equipment sector, manned by the likes of Applied Materials and Lam Research.
While the entire U.S. population slumbers under the suffocating gas of Central Bank Printing the cracks from totally stealing an entire populations disposable income is coming home to roost on the the beautiful people’s companies. The FANG’s, plus the Noveau rich’s favorite food emporium is starting to collapse. It is these companies collapsing that will bring the visibility and fear required to shake the market, and free the bears. Why?
This is this generation’s Nifty Fifty, in the sense that it totally dominates the young people’s waking life (I know, I have a 15 year old), the California chattering and Chardonnay class, and the Investment Bankers seeing their Unicorns racing back to Atlantis, and with it billions in fees and investor’s fortunes.