Intel and Texas Instruments released mid-quarter updates after hours today. Both companies narrowed their revenue forecasts. TXN increased their 3Q earnings range, while Intel stayed the course. From a fundamental standpoint, these releases were non-events. The bull and bear camps were both hoping for number revisions sharply in their favor, but both were disappointed. What will be more important than the numbers themselves is how the market reacts. If the bulls are more disappointed, collectively, than the bears, we will see selling. If the bears are more disappointed, collectively, than the bulls, we will see short covering. Therefore, if the stock prices move sharply in either direction tomorrow, it will be an important psychological indicator, and may predicate more action in the same direction.
Generally speaking, today's equity market were a non-event with the exception of some housing action. The homeys fell about 2% following Hovnanian's disappointing results. Earnings misses or surprises tend to come in streaks, so the housing bears are foaming at the mouth. Don't be surprised, though, if they get mistaken for rabid and taken out and shot. The resilience of some doomed companies, such as XMSR, INTC, and RIMM, has been extraordinary, so the bulls may yet punish housing bears again.
Disclosure: Short INTC, XMSR, RIMM; Long INTC, TXN, XMSR Puts.