The RF to Light 100 dropped 1.6% last week, YTD +13% at 2458. NASDAQ dropped 1.9% to 2413. Finisar's stock sank 15% after lowering expectations - dragging down other F/O stocks. While the telecom service providers will need to upgrade their equipment to compete with cable, they prefer to deal with fewer suppliers who can manage most of their needs. Alcatel/Lucent and Nortel have been the big ones. With the telecom's consolidation, it will be even harder for the smaller equipment suppliers such as Sycamore, Oplink, Avici (each with under $ 100m sales)to compete. And then there is China's Huawei who wants to do more in North America and probably is looking for acquisition(s). Verizon's TV plan to cost $ 18b, told analysts last week that the company expects to start generating operating income from its fiber network by 2009, turn positive on operating cash flow in 2008. Fiber networks are cheaper to operate than the old copper network, download the fastest at 50 to 100 megabits a second and offer pristine high definition TV. The F/O component market sector is 35% off its 52 week high. Qualcomm's stock dropped 5% last week ahead of a legal showdown next week with Broadcom.

PIS (personal investment system): stocks within 15% of their 2 year low: Powerwave, Qualcomm, Nortel, Flextronics, ADC Telecom, Sycamore, Solectron.

In the news:

November manufacturing declined to its lowest level in 42 months, the ISM's PMI fell to 49.5%, below the neutral level of 50. It should be consistent with the GDP growth slowdown. Consumer confidence index wich edged down in October, declined further in November. The dollar continues tumbling. And investors wonder whether a end-of-the-year rally would crown an impressive rebound since July 06.

New Lows : none

Market oversold indicator: up to 76%
Market overbought indicator: down to 55%

Top 5:

last week: Avici (7%), AMCC (7%), HEI (5%), Verisign (4%), Bell South (4%)

YTD : Broadwing (153%), Avici (92%), Sirenza (91%), Amkor (78%), MRVC (75%)

Bottom 5:

last week: Finisar (-15%), Broadcom (-10%), Tellabs (-10%), Rogers (-8%), Harmonic (-8%)

YTD : HEI (-56%), Powerwave (-50%), Vitesse (-41%), ADC (-38%), Zhone (-38%)

by Sectors:

Space & Defense : 0%, YTD +19%
Communic. Services: +1%, YTD +33%
Network Systems : -2%, YTD - 6%
RF Semiconductors : -2%, YTD + 9%
RF Components : -1%, YTD +15%
F/O Components : -4%, YTD +16%
Miscell. : -3%, YTD +13%
RF to Light 100 : -2%, YTD +13%