Take a Close Look at Semiconductors Ahead of Intel Earnings $INTC

With Intel set to report earnings after the bell, let’s take a close look at the PHLX Semiconductor index and see if it’s offering any clues.

Last Sunday’s Exodus strategy session revealed the importance of technology, in particular semiconductors, to overall market direction this week.  Here’s my Thesis for The Week, an succinct summary for the executive types who don’t have time to mull over the entire report:

I. THESIS FOR THE WEEK

Raul’s bias score 3.15, Neutral.  Next week is very light on scheduled economic events, however there are major tech earnings out including MSFT, GOOGL, and AMZN.  These will have a major impact on the tech-heavy NASDAQ.  Look for the NASDAQ to lead this week, and initially look for a probe lower back into the value established early this month just below 4500 (on the June futures contract, /NQ_F).

Also watch the PHLX semiconductor index which is lingering on range high [see Section IV] for clues on market direction.

While CNBC commentary is rosy today, they are glossing over the weakness in the NASDAQ.  Moreover, the semiconductor index is selling hard off its respective range high.  This index is throwing up a major caution flag heading into the INTC earnings.  Anything less than a steller report could send the index on a quick trip back down through the range, see below: