Semis and AMSC

Semis have been acting bad lately, it's been noted many times here. Today was an exception, then after hours AMSC announces that a Chinese company that it does most of its business with, refused to take delivery of goods already under contract due to Chinese overstock. AMSC plunged 40% in after hours trade. I do find the strength in semis today a bit strange with this news out at in after hours.

 AMSC has been in trouble for awhile. When you see the breadth posts I publish periodically, you can understand that not all of the stocks in the market are in uptrends, there are plenty that look like this, which s why the advancing market on poor breadth is a dangerous market.

 Looking at the recent bounce which is nothing more then "A rising tide lifts all boats", meaning it's simply following the market as the market's direction is the single biggest factor in an individual stock's direction we can see the quarter end effect. A closer look reveals more.


 AMSC had problems before this bounce as you can see the test of $30 failed, the recent behavior though is more curious.

In the bear flag (market bounce) note when 3C really turned down sharply, right at quarter's end which leads me to question when this information was first known (I doubt tonight's disclosure was the first time t was known) it also raises some questions about strength today in semis as they have not been performing well. Perhaps today was a final chance to sell semi stocks before the sector gets taken to the woodshed on the AMSC disclosure. If so, then what's coming out in the form of bad news in today' fairly well performing retail sector?

The complete story on AMSC can be found here at ZeroHedge

As I stated last week, returns for the market will be kept as high as possible into the end of March (just look at the above chart and dates), after that I expected to see some realignment of portfolios and de leveraging (selling). I'm growing more and more suspicious of this market's resilience and getting a bad gut feeling for events that could be unfolding rather shortly and abruptly. Breadth has been telling the story behind the market's advance, it is a multi-dimensional story.