Today is one of those days you are going to hear on too many occasions the words "monster quarter" and "blow-out earnings". On days like this, the financial pages are just like the sports pages - you know the quotes like "I gave it 110%" or "He or she brought everything to the table". We seem to be caught up in the pressures of time so that even things that are important must be compressed to six-second sound bites and bullet points on a page. I prefer a more thoughtful approach, using judgment and skill to assess the current situation in an ongoing effort to buy and sell before the crowd.

This weekend in the WIR, I wrote about Intel (INTC). I encouraged you to buy. In fact, comparing INTC to IBM (IBM) and Hewlett-Packard (HPQ), all of which I liked for the immediate term despite Wall Street titans like Barton Biggs advising you at the end of last week to sell, sell, sell, I wrote the following:

I saved the best for last: Intel (INTC).

Here are the charts for INTC ($20.24 7/09 close; down -10.24% in 2Q2010 (Previously: $22.55 4/09 close, up +$1.72 (+8.26%) from its close at $20.83 13 weeks prior to that on 1/08, which was up +3.3% vs $20.17 at the 10/9 close;):

At 7/09, the RSI-7 for the Monthly/Weekly/Daily for INTC was 51.3 (has fallen a lot) / 43.3 (has fallen a lot) / 54.8 (down a bit from 4/09, but rising).

At 4/09, the RSI-7 for the Monthly/Weekly/Daily for INTC had 71.9 (hot) / 78.8 (danger zone) / 63.2 (blip up on Friday). That was a strong heads-up I gave you 13 weeks ago. In fact, how about the call that I made on 4/09 with the price at $22.55:

INTC looks to me like it could set a new 52-week high this week, but I wouldn't be flirting with danger. Raise your stops. There was a Daily data SELL Alert on Apr 06 at $22.40, and Friday was up +$0.31 (+1.10%), so we'll have to see how this one plays out. There were Distribution Zone signals on the Weekly data at 3/18 at 22.20 and 4/09 Friday on the Monthly data at 22.55.

There was in fact a 52-week high for Intel on 4/15 (i.e., the next week) at $24.37. Then my danger-alert proved timely as well as the stock closed this week at $20.24, with a low of $18.96 on July 2.

As I said, the balance sheet strength of Intel is second to none. Operationally, there has been a big turnaround. From a loss in 2Q2009 of 7 cents per share, there is likely to be a profit of about $0.43 this quarter, and big Q/Q improvements in the next couple quarters. Earnings momentum then is the name of the game here.

So now I'll put the semi in forward gear, and tell you I like it here and for the immediate term (next couple weeks) and for the longer term. In the short-term however, i.e., from say sometime in August into Oct-Nov, I am worried about the oncoming traffic on the NASDAQ highway. The broad market might pull back in late summer. If that were to happen, it'll be hard for INTC to move against the flow, so this one might require a gut check for some of you. But if your disposition is rather long-term, I'd buy a little here and write some puts, which will allow you either to lower your cost base or take on a bit more stock at lower prices. Don't be shy.

The stock price at the close on Friday was $20.24. It had moved up over +5% in recent days, in the midst of a market sell-off. I wanted people to think long-term: "Buy a little here and write some puts, which will allow you either to lower your cost base or take on a bit more stock at lower prices. Don't be shy." INTC opened Monday at $20.31 and had a low of $20.30, so you didn't have to miss it.

After the close yesterday (Tuesday), Intel reported a "monster quarter" with "blow-out earnings" and today the stock could hit $23, a three-day move of about +15%.


If you listen to Wall Street you'd have been like a deer caught in headlights, and that's why I constantly advise you to tune out of Financial Entertainment TV and tune in to actual corporate data and market prices.

Seeking Alpha carried a blogger's in-depth summary of the Intel results. I haven't had the time to read it, but it's probably informative, and much more so than what you'll find on Bloomberg and CNBC from talking heads who are speaking for somebody's interests other than your own.

So, today, with Intel driving enthusiasm into equity markets, prices are likely to lift again. Summer rally time.

{{WIR Wrap-up}} Time to go, but I'll leave you with these comments that if the international markets can stay positive overnight and the S&P can open slightly up or down on Monday, I think we'll see what will be called a "summer rally" continuing through next week. I don't expect much to come of it, possibly +2.5% to +3.0% more on the S&P to 1120, and then traders will have another assessment after looking over the corporate earnings reports, the macro-economic data, forex, bond yields, sovereign debt, and commodity prices at that point.

Funny, I didn't read that anywhere except in the Bill Cara Blog.

Another thing you are unlikely to hear today is the advice to not get caught up in chasing INTC. The price has come a long way since July 2's low of $19.01. If it hits $23 today, that's a $4 lift, which would be a gain of +20% off the low in just seven trading days, which is a lot for a mega cap stock like Intel ($117 billion as of yesterday). The price will fluctuate: buy low and sell high. Get in the habit.


The equity futures are presently down and bonds are up, represently a safe-haven from risk, but not to worry. Intel is carrying the flag today.


Have a great day.