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Looking at FedEx and Intel for Market Tells


There are times when critical clues are provided about the general market but are predicated upon individual companies.


Fast forward to Friday where a bad employment number and an Intel (INTC) earnings warning appeared ready to shake the markets lower only to fail. The market worked higher off the bad numbers coupled with the continued momentum from the European Central Bank's bond purchase program, but Intel didn't fare nearly as well losing over a $1 on the day. The same was true of Monday with another buck being carved off the price. Bad news, you would think, but if you pull back the chart on Intel to consider it from the intermediate term perspective, it appears highly probable that the stock will find support soon around the $22.50 area. That is the confluence of the ABCD down projection on the weekly chart as well as the meat of anchored support zone.


How Intel behaves at that level and on the subsequent bounce will tell us a lot about the general market, but if I leave that aside and just examine how supply and demand are currently unfolding, the current test says the bulls will win this battle as well. Of course it has to play out to completion since volume and/or price could surprise but, for now, the current take is that anchored support will hold and Intel will not bring down the key chips sector as a result.

Folks, since joining up with Minyanville and beginning to share my thoughts I have focused on my neoclassical approach to reading the markets. Starting with the article Trading Tip: Why You Should Ignore Patterns and Focus on Levels where the anchored resistance zone forced me to flip back to the short side for a trade after the first bounce off the May bottom, to the What the QQQ Reveals About the State of the Markets article where I laid out the parameters of how the market would likely tell us to get long again, my focus has been centered on tests at key supply and demand areas as they appear on the chart. Neoclassical TA is all about supply and demand as told through the charts. It's not always right, for nothing is, but for those of you have read my scribblings so far, it has a respectable record.

Twitter: @tatoday
No positions in stocks mentioned.
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