NFTRH; Semi Sector & Stock Market

Semiconductor Equipment Book-to-Bill

The Semiconductor Equipment book-to-bill ratio for November is out and it improved per the table below.  I will work the data into a graph similar to the one we reviewed after the October data were released, and include it in NFTRH 322.

Here is the source report for the B2B from SEMI.

semi

To review for newer subscribers, the B2B is a forward looking Canary in the Coal Mine and had it continued downward we’d have been on high alert for a coming deceleration in the economy just as an improving B2B signaled coming strength in manufacturing (ISM) and eventually employment in early 2013.

As for nominal bookings:

“The three-month average of worldwide bookings in November 2014 was $1.22 billion. The bookings figure is 10.4 percent higher than the final October 2014 level of $1.10 billion, and is 1.7 percent lower than the November 2013 order level of $1.24 billion.”

The above can still be interpreted as a downtrend, but I don’t see anything actionable yet from the perspective of a negative economic signal.

Stock Market

Santa flew over, must have hit a star, lost control and crashed right through the roof.  He is here and he has retaken big chunks of the stock market’s recent downside.

To review, the first half of December was planned to be negative per way over bullish sentiment and the handy seasonal chart we reviewed from Sentimentrader.com.  If all went well, the sentiment reset of a correction and the Santa seasonal play would provide a pop.

The Russell 2000 took back the broken support as noted for IWM in the ETF update and this too is in line with the seasonals.

rut

The rest of the market has either stayed above or gotten back above its 50 and 200 day moving averages and that can only be considered technically positive.  Of course, the risk vs. reward is now nowhere near as good as it was when everybody was freaking out as SPY hit our downside target of 198.

We will have more detail in NFTRH 322, but I just wanted to update a couple things.