Analysis:
Yesterday's Analysis predicted that "the market will initially rise on the news of the upbeat earnings report from Intel, but whether the rise can be sustained depends on the market's perception of whether Intel's earnings growth is sustainable into next year." Today Intel did open higher but dropped throughout the day to close 2.7% lower. However, the broad market stayed elevated throughout the day and finished in an up note. The irony is that although Intel settled lower, the market rally was driven by technology stocks, as Intel's upbeat earnings report raised expectations of similar above-par performance of other technology companies. Today's Intel performance may shed light to the market performance tomorrow, as investors will consider the market "overbought" in light of the market's sharp rally recently. As a result, the market will end lower. A significant market retreat, if any, would provide an opportunity to get long.
Strategy:
Hold short at 1,157
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