Exerpted....re chips. from TSCM.
"It seems like every time I turn around, I hear about a new downgrade of some semiconductor stock. A common reason is that excessive optimism about the economy by high-tech manufacturers has led to bloated chip inventories. As such, near-term demand just won't be as strong as expected.
But while the chip sector is certainly not in great shape, the more important question is how the price action lines up against the news. Are the stocks still being sold when the news is bad, or do they just refuse to go down any more?
If it's the former, then the bears still control the action. But if the latter scenario unfolds, then we have a pretty good idea that the market already knew that things were really bad, and acted on that information. So by the time the news hit the wires, there was no one left to sell. And with no aggressive sellers, a stock will begin trading higher as interested buyers must raise their bids to take stock from coy, disinterested sellers. That's the stuff bottoms are made of."
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