SMH Semi Holders Woes

http://stockcharts.com/def/servlet/SC.web?c=smh,uu[w,a]wallyiay[pc20!c5][vc60][iut!Ub14!Lh14,3]&pref=G 10 yr chart WHAT recovery?

When you factor in that the index is lower even after INTC declared they would raise their capex spending by about $1 Billion, this sector is even more telling. And I think most of tech suffers from overcapacity issues. You can add China as aprime reason with their emergence as a world competitior.

Only a few tech companies make any money. The generals INTC and MSFT look sick and sell at 5 yr lows. They are NO longer a growth story. The SEMI engine is hurling a fur ball.

INTC still trying to destroy AMD by lowering flash memory prices, INTC can outlast any competitor, this was a nice business for AMD. INTC profit margins have also suffered.....and so has its price. INTC hypsters touted their numbers last week, but INTC stock is now lower than after the earnings call, while other cheapie tech's move on.

We have the END to BUSH tax incentives for investment, which ended in 2004, I think has influenced results this QTR (which is always looking back 3 months).

Sooner or later the stock market is going to SNIFF a slowdown in the economy, and it won;t matter what the FED does, what manipulation occurs, this rally is going to get retraced. But the market isn't screaming a warning anyone is heeding, or acknowledging.

I am still watching to see if the indexes break thru the 20 EMA, it is now declining and I think it might repel this rally.

I can't nor can anyone pinpoint exact timing for the return of the Secular Bear Market, but I can assure you it is not over. That being said, I personally choose to sit out this market. And I won't be a buyer until better values show up.

And I am not alone in thinking 2005 can be a challenging year, but you wouldn't know it from the Wall Street chatter.

I will continue to tell it like it is.

Duratek