Catching up with INTEL

“U.S. antitrust prosecutors sent 15 executives from four companies to jail for price fixing of memory chips. There was a rub: The collusion failed.”, this was the article carried by Bloomberg Markets in it’s Jun 2008 issue. This is not the first time executives have gone to jail. We highlighted the Jamie Oli case on 19 February, 2007 (Deficient Market Hypothesis). Jamie served two years of his 24 year initial sentence.
Sending executives to jail for accounting fraud is something else, but accusing them of manipulating the market and that too a highly commoditized chip market is nothing short of economic incomprehension. Sentencing for a failed manipulation suggests that not only the executives understood what moves the market but even the judges failed to understand the same. The semiconductor and technology sector is a mature market now, not easily manipulatable. Both buyers and sellers are capitalized and cornering or controlling the market is an illusion. And even if manipulation was possible, it was tough to change the secular trend of the prices. This is why the collusion failed, as prices continued to dip despite price fixing.
What is happening with Intel and the forecasting accuracy technicians can deliver through charts highlight that information access and investigative research works less and less as markets mature. We highlighted Intel anticipated case in WAVES.GLB.050808 issue when at 22.52 we said that Intel should move up in an A-B-C corrective up till 26 before turning down. Correctives are counter trends which are short-lived. After which the trend resumes. This is what happened as prices moved back below 18.5 and are now pushing lower potentially till Oct 2002 low at 12.95. These are the last support standing for Intel. A break here can see Intel push lower till 10.
And if this might look as an accuracy in isolation, look at our last week recommendation change to DOWN on UTX, DUPONT and earlier negative calls on Caterpillar, 3M, Home Depot, GE and Disney. We have highlighted some of the cases. About the few positive stocks we have been carrying over in the tracker over the last few weeks viz. JPM, BAC, MSFT, HP, COCA COLA, MAC, WALMART, PFIZER, P&G, and JNJ. HP and JPM seems to weaken. HP will need review sub 42-40 levels. And JMP has formed a negative KEY REVERSAL bar (Daily, weekly, monthly and quarterly) and could push lower next week. Rest of the DOW 30 still seem to hold ground. Now with more than 2/3 of DOW 30 inching to negativity, AIG kicked out and KRAFT FOODS joining in, the DOW 10,000 breach and Oct low is what we are waiting for.
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