NY's Cuomo hits Intel with antitrust suit - just as semiconductors weren't helping equities markets anyway

There's news tonight that New York's attorney general watchdog Cuomo has initiated an antitrust lawsuit against Intel: MarketWatch - New York's Cuomo names Intel in antitrust lawsuit (11/4/09). This is after it's already dropped steeply from the pop up it made after its supposedly favorable earnings report. Yet another example of why we buy and sell on charts, not news or so-called fundamentals! Maybe this sector will do a "buy the news" move, but notice that both Intel and the semiconductor index ($SOX) are leading the Nasdaq and other indices down with retests of the October lows that look a lot like "C" waves down just starting. Actually I'd have to look in on Tony Caldaro's chart lists to see what he's got for the wave count. But there's a gap in the $SOX chart at $270, which is about where its 200-day moving average sits. That would be another substantial wave or so down, probably going along with the broad markets decline we're thinking will materialize pretty soon.

On the monthly chart, the $SOX is above support. But a drop to $270 would place it under that support (from the Bollinger Band midline area). It's possible it will get some support for a little while longer. But remember, in a "C" wave, both news and the price response can be bad! So don't try catching a falling knife. Intel looks rather similar to the rest of the semiconductor index - with a gap that can be filled with a test of the 200-day moving average. That might be a speculative buy level, looking for some amount of bounce from that. Or if you're trying to buy some currently, at least don't forget to use stop loss orders or hedges in case you're trying to catch a short-term bottom - you don't want to catch a falling knife!