Two weeks ago a Piper Jaffrey analyst appeared on CNBC explaining in his downgrade of Intel to a "buy" from a "strong buy" that "96% of the chips the company produces are effectively unsaleable." The CNBC guys blanched, scoffed a bit, and went on to the next story. Today, with Intel's pre-announcement of lower earnings, CNBC suddenly cares again. The light bulb has now also turned on (finally) for the rest of Wall Street's overpaid analyst purveyors of pabulum that: Intel has a real problem. Intel's a behometh company that suddenly needs to reinvent itself. The PC market is a mature one with increased saturation, tighter sales margins, and slowing sales growth. This has been obvious for months, but if you depend upon the popular media, this appears as a new revelation only today. Wall Street should be truly ashamed.

Now we would never advocate trying to step in to catch a falling knife, but if Intel is to find some support somewhere, we'd look for that support to begin at approximately $41-$43 a share. This is just beyond a 50% retracement of the 1998-2000 upmove, with $41 representing a gap left on the daily chart of Intel back on January 10th of this year. $43 is a level where the rhythm of the Fibonacci bands as pulled down from the August 28th 75 13/16 high next looks most tight.

Chart produced using Advanced GET End-of-Day

So the first time we get down into the region, don't be surprised to see a hardy bounce. But longer term, the bear market on Wall Street likely just begins. When other darlings like GE and Sun eventually join the party, we will be in even deeper trouble. Subscribe below to Sandspring.com, and you will get instant access to our longer term equity index charts (NYA, DJIA, and Nasdaq) with analysis produced September 15th, as well as our recent fundamentally-oriented piece, "Where the Excess Lies." Your susbcription also includes all past articles and at least three future ones over the next three months.

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