Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of LED lighting expert Cree (Nasdaq: CREE) turned off the light this morning, fading as much as 10.5% on above-average trading volume.

So what: Cree and LED tools builder Veeco Instruments (Nasdaq: VECO) were buried in an avalanche of analyst downgrades today. Even bulls with a "buy" rating on the stock came in to slash target prices.

Now what: The consensus opinion here is that manufacturing capacity is coming online faster than demand for LED lights is growing, which is bad news for product prices. Compare and contrast this with the eternal waves of oversupply and undersupply in the memory chip industry as exemplified by Micron Technology (Nasdaq: MU), and you'll see that there's a ton of money to be made if you buy in when there's blood in the streets -- then decide whether we're close enough to the market bottom before making an investment decision.

For your reference, Cree shares more than tripled after the last downswing and have lost about 70% of their value from the three-year top. Even if this knife keeps falling, the solid floor shouldn't be too far away.

Interested in more information about Cree? Add it to My Watchlist.

Fool contributor Anders Bylund owns shares of Micron but holds no other position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.