The past 16 months' trading in shares of Intel are one of the great "the market leads the news, not the other way around" stories we've ever seen. It's a story we constantly updated you on.
Last year, the world's largest producer of semiconductors was a monthly guest in this column. Intel makes the tiny engines that run the world's computers... which makes it a high-tech version of Dr. Copper. Tracking Intel's sales, profits, and share price gives us an "instant read" on the world's economy.
In April, we noted how Intel shares held like a rock around $15 after releasing a horrible earnings report. When a stock holds steady or rises in the face of horrible news, it's a classic sign the bottom is in… and things are destined to get "less bad." Intel moved exactly as we scripted and shot up 33%… and the economy got "less bad."
We've come full circle now. Eleven days ago, Intel reported a huge 28% increase in sales and beat analysts' expectations. So what did shares do with this great news? They fell!
The moral of this 16-month story: You'll never make money buying on bullish news or selling on bearish news. "Easy" trades like that never work. This is one of the hardest lessons for a new trader to learn. We think this short-term story of Intel is a great teacher.
Last year, the world's largest producer of semiconductors was a monthly guest in this column. Intel makes the tiny engines that run the world's computers... which makes it a high-tech version of Dr. Copper. Tracking Intel's sales, profits, and share price gives us an "instant read" on the world's economy.
In April, we noted how Intel shares held like a rock around $15 after releasing a horrible earnings report. When a stock holds steady or rises in the face of horrible news, it's a classic sign the bottom is in… and things are destined to get "less bad." Intel moved exactly as we scripted and shot up 33%… and the economy got "less bad."
We've come full circle now. Eleven days ago, Intel reported a huge 28% increase in sales and beat analysts' expectations. So what did shares do with this great news? They fell!
The moral of this 16-month story: You'll never make money buying on bullish news or selling on bearish news. "Easy" trades like that never work. This is one of the hardest lessons for a new trader to learn. We think this short-term story of Intel is a great teacher.
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