1:00pm (EST)
The market opened slightly higher after getting better-than-expected GDP numbers as Wall Street awaited Federal Reserve Chairman Ben Bernanke’s scheduled speech on the economy which was happening 30 minutes later.
However, Intel (INTC, $18.38, up $0.20) dropped a bombshell at the exact same time by lowering its revenue forecast for the current quarter. There was panic selling but the bulls held ground after hearing soothing comments from Big Ben.
As far as his comments, he said the Federal Reserve may buy additional longer-term securities but this could pose a big risk going forward since the central bank is unsure of the exact effects this step may have. Bernanke went on to say that they could also keep interest rates exceptionally low for a longer period than what many are expecting, and that the Fed could reduce the interest rate it pays banks for reserves they hold with the Federal Reserve System.
As far as the current economy, Bernanke said private demand and employment in the U.S. economy are “increasing” while lending standards to households are still tight and the housing market remains “depressed”.
Although the bulls took the comments as “good news”, it was really a bunch of hot air that was carefully worded.
As far as Intel, the company cut its sales forecast, citing a weaker-than-expected personal computer market. The company said it now expects sales of $10.8-$11.2 billion, compared with a previous range of $11.2-$12 billion.
Shares of Intel were halted before the announcement and traded to a low of $17.81 but made a sharp reversal after being defended by some analysts.
As we head to press, the Dow is showing a 117 point pop, or 1.2%, and is at 10,103. The S&P 500 is higher by 12 points to 1,059 while the Nasdaq is up 20 points to 2,139.
We are watching the 1,040 level on the S&P and the index has traded to a low of 1,039 today. Despite the rally the bears should win the week with ease and the market should continue its trend lower next week after the bulls realize the Fed cannot save the economy.
We had a great week as we were able to close one of our current trades for a 140% return. We also have quite a few open trades that we remain excited about and we are expecting big gains for them as well.
We will be back Sunday night with the Weekly Wrap and our Watch List is exploding with new possible trade ideas. You can bet we are going to be doing some research over the weekend to find the juiciest plays for the weeks ahead. We will also give you an update on our Auto-Trading program and we will be covering a strangle trade or a straddle option trade in a new section we are starting.
Tags: INTC, Intel halted, option picks, RIMM, stock options trading
This entry was posted
on Friday, August 27th, 2010 at 1:03 PM and is filed under Company Commentary.
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Bernanke Speaks, Intel (INTC) Warns, Market Rallies
1:00pm (EST)
The market opened slightly higher after getting better-than-expected GDP numbers as Wall Street awaited Federal Reserve Chairman Ben Bernanke’s scheduled speech on the economy which was happening 30 minutes later.
However, Intel (INTC, $18.38, up $0.20) dropped a bombshell at the exact same time by lowering its revenue forecast for the current quarter. There was panic selling but the bulls held ground after hearing soothing comments from Big Ben.
As far as his comments, he said the Federal Reserve may buy additional longer-term securities but this could pose a big risk going forward since the central bank is unsure of the exact effects this step may have. Bernanke went on to say that they could also keep interest rates exceptionally low for a longer period than what many are expecting, and that the Fed could reduce the interest rate it pays banks for reserves they hold with the Federal Reserve System.
As far as the current economy, Bernanke said private demand and employment in the U.S. economy are “increasing” while lending standards to households are still tight and the housing market remains “depressed”.
Although the bulls took the comments as “good news”, it was really a bunch of hot air that was carefully worded.
As far as Intel, the company cut its sales forecast, citing a weaker-than-expected personal computer market. The company said it now expects sales of $10.8-$11.2 billion, compared with a previous range of $11.2-$12 billion.
Shares of Intel were halted before the announcement and traded to a low of $17.81 but made a sharp reversal after being defended by some analysts.
As we head to press, the Dow is showing a 117 point pop, or 1.2%, and is at 10,103. The S&P 500 is higher by 12 points to 1,059 while the Nasdaq is up 20 points to 2,139.
We are watching the 1,040 level on the S&P and the index has traded to a low of 1,039 today. Despite the rally the bears should win the week with ease and the market should continue its trend lower next week after the bulls realize the Fed cannot save the economy.
We had a great week as we were able to close one of our current trades for a 140% return. We also have quite a few open trades that we remain excited about and we are expecting big gains for them as well.
We will be back Sunday night with the Weekly Wrap and our Watch List is exploding with new possible trade ideas. You can bet we are going to be doing some research over the weekend to find the juiciest plays for the weeks ahead. We will also give you an update on our Auto-Trading program and we will be covering a strangle trade or a straddle option trade in a new section we are starting.
Tags: INTC, Intel halted, option picks, RIMM, stock options trading
This entry was posted on Friday, August 27th, 2010 at 1:03 PM and is filed under Company Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.