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Is This Turnaround Tuesday?

By Jeff Clark
Tuesday, July 11, 2006

If you’re looking for immediate profits, buy technology shares on any weakness this morning.
 
I know it sounds crazy, but I’ve seen this set up before... and it’s as close as we’ll get to a “sure thing” in the stock market.
 
Take a look at the following chart of the semiconductor index (SOX)...
 
Semiconductor Index ($SOX)
 
At first glance, there’s nothing even remotely bullish about this chart. After all, it’s hard to get too excited about a sector that’s declined for nearly two months straight.
 
But yesterday’s action has all the makings of an “exhaustion” sell-off similar to what we saw in mid-June. Back then, the SOX index rallied over 6% in just two days. I think we’ll see an even bigger bounce this time around.
 
Let’s face it, no one likes tech right now. Investor sentiment is overwhelmingly bearish. Public short sales are as high as they were back in October 2002. And asset levels in technology sector mutual funds are at historically low levels.
 
But with everyone piled up on the bear side of the boat, it won’t take much to tip them over. The slightest hint of upside action will do the trick.
 
Of course, when it comes to the stock market, nothing is guaranteed. But we have all the ingredients necessary for a strong bounce in technology shares. If you buy into any weakness this morning, the odds are pretty good you’ll be sitting on profits by Friday.
 
Best Regards & Good Trading,
 
Jeff Clark




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Country-specific funds trading at large premiums to underlying asset values:

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Turkey (28% overvalued)
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Market Watch
Symbol Price
Change
52-Wk
S&P 500 1228.28 +0.4% +12.5%
Oil 37.96 +0.4% +3.0%
Gold 134.79 -1.3% +21.5%
Silver 27.70 -1.4% +60.1%
US-Dollar 79.96 +0.4% +4.9%
Euro 1.33 0.0% -9.8%
Volatility 17.74 -1.4% -25.1%
Gold Stocks 563.51 -2.3% +27.7%
10-Year Yield 3.24 +2.5% -4.4%

World ETFs
Symbol Price
Change
52-Wk
USA 123.28 +0.4% +12.5%
Canada 30.21 -0.7% +18.9%
Russia 21.85 -0.7% +21.4%
India 37.51 -1.7% +21.5%
Israel 16.84 -0.5% +12.1%
Japan 10.59 +0.3% +6.5%
Singapore 13.74 +0.6% +20.1%
Taiwan 14.81 -0.4% +19.2%
S. Korea 57.08 -0.5% +23.2%
S. Africa 71.34 +0.3% +30.5%
China 43.30 -1.6% -0.8%
Lat.America 52.25 -0.8% +9.1%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 135.21 +0.2% +21.5%
Big Pharma 64.01 -0.1% -1.9%
Internet 73.02 +0.2% +28.7%
Semis 16.43 +1.1% +28.1%
Utilities 30.87 -0.4% +0.3%
Defense 18.50 -0.3% +9.2%
Nanotech 10.10 -0.6% +1.1%
Alt. Energy 10.28 +0.8% -3.1%
Water 18.78 +0.1% +16.1%
Insurance 16.28 +0.9% +21.9%
Biotech 20.67 +0.1% +28.9%
Retail 19.49 -0.8% +27.1%
Software 24.98 +0.6% +26.4%
Big Tech 54.08 +0.4% +23.9%
Construction 13.31 +0.1% +17.8%
Media 13.80 +0.4% +23.8%
Consumer Svcs 67.39 -0.1% +24.1%
Financials 55.78 +1.5% +9.4%
Health Care 63.99 +0.2% +2.3%
Industrials 63.65 -0.2% +21.1%
Basic Mat 73.75 -1.1% +28.2%
Real Estate 54.70 -1.5% +23.3%
Transportation 91.23 -0.5% +24.8%
Telecom 22.68 0.0% +15.5%