Market Shrugs Off Lowered Guidance From Intel

The market was higher right after the open, after Q2 GDP was revised down to 1.6%, which was still higher than the 1.4% many were expecting. Additionally, personal consumption for Q2 was actually revised higher to 2.0% from 1.6%.

So the GDP report gave a boost to the market, but then Bernanke's comments from a symposium in Jackson Hole were released and the market gave back all of its early gains. I'm not sure what people were looking for, as I think the message from the Fed Chairman has been fairly consistent. Maybe its another case of expectations being too high.

The other news item that pushed the market lower was updated guidance from Intel (INTC). Intel said it expects revenue for Q3 to come in a range of $10.8 - $11.2 billion, which is below Street forecasts for $11.5 billion right now.

But after the brief swoon lower this morning, bears look like they are having difficulty gaining traction, and as of this post the market is rallying again back into positive territory. If the bears can't regain any traction into the close today, I think we could see additional short covering boost the market.

Energy and materials stocks are leading the early action, while tech is lagging.

Asian markets were mostly higher overnight; the dollar is higher today while the euro is lower; oil prices are down to $73.20, and gold prices are roughly flat near $1237.

The 10-year yield is nicely higher to 2.58%. I want to see yields move a bit higher, just to take the fear of deflation off the table. And the VIX is down -2.8% today to 26.61, which is still above its 50-day average.

Trading comment: The S&P 500 once again held that 1040 level that I mentioned the other day. So for now this looks like solid support, and hopefully we can build on today's early gains. The market is still oversold, and sentiment is very bearish. Those are the normal ingredients one usually see before a relief rally in the market.

I took more of my hedges off yesterday, and added to a couple of long positions. While the market could still have another move lower in the always feared Sept.-Oct. timeframe, I think we should get a short-term bounce first.