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I'm not saying stocks can't continue to work higher, because they can. I'm not saying that people aren't feverish right now -- "Which stocks do you have that are single-digit tech and look like they can double?" -- because they are.

What I am saying is that some of the advances we're all marveling at are getting especially heady. That, combined with some of the stuff I'm hearing ("You know, I never sold ABCD. And now the stock has doubled off of its lows. Don't you think it works a little higher before resistance becomes important?"), suggests the easy money is already in the bag.

Let's take the Philadelphia Stock Exchange Semiconductor Index, or SOX, as an example.

Lots of Work Ahead
The SOX still has resistance to overcome

Source: Arnhold & S. Bleichroeder

Historical Patterns
Can the SOX do it again?

Source: Arnhold & S. Bleichroeder

Consider this:

    If you set aside Motorola (MOT) and Rambus (RMBS) - Get Rambus Inc. Report, which don't act like they're members of the index, the remaining 14 components are up 66% since their lows of late September and early October. Awesome, baby! The rise in the index is outstanding (up 57%) only if you include Motorola and Rambus. Now, if you use a run-of-the-mill 14-day relative strength index and know that the index is still below a downward sloping 200-day moving average, you'll see only two prior instances in which the SOX has risen this way: the period from Oct. 27, 1997 to Feb. 4, 1998, and again from June 2, 1998 to July 17, 1998. The index then encountered enough resistance at its downward sloping 200-day moving average to make performance less uniform. The 200-day moving average is currently at 572 and declining. As the above charts show, while the SOX has moved ahead of a downward-sloping trend line and is about 19% above its 50-day moving average, the index is moving into an area of overbought territory that it has visited only twice since mid-1994 (see the second chart). Both periods were accompanied by an upward-sloping 200-day moving average. That's something we don't have here.

So while all is great in the semi performance camp, the index is near an area -- somewhere between 5% and 10% -- where the current rally is likely to run out of steam at 5% to 7% higher. I just figure I'd be taking profits or reducing positions if I owned

LSI Logic

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which are up 98% and 97%, respectively, in six weeks.

P.S., a trivia question:

I'll send a copy of

A Flame of Pure Fire: Jack Dempsey and the Roaring '20s

by Roger Kahn to the first person who can tell me which boxer was known as "the Onion Farmer."

John Roque is the technical analyst at Arnhold & S. Bleichroeder, a New York-based investment brokerage firm specializing in Europe and the U.S., and a frequent guest on CNBC. At time of publication, Roque had no position in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback and invites you to send it to

John Roque.