Watch the price action of Intel stock to see where the broader market goes

For the second time in as many months, Intel downgraded their sales and profit expectations for the quarter just ended. It was a whole $2B less than their initial projections from October of last year. Just imagine that! In 3 months, they have had to cut their sales projection by 20%!

Now, why do I think Intel is a bellwether stock? Shouldn't GE play that role, it being a much more diversified company? The reason why I think GE stock does not show how the real economy is doing is because of its large dependence on the performance of their finance operations. This unit single handedly screwed GE's March quarter (of last year).

INTC dropped 6% today after their latest warning, but that takes the stock price back to where it was just a week ago. To me, that makes me think that all the bad news for Intel is factored into the stock price. As it sits right now, it has a very compelling valuation. This is also around the lowest price it was at post the dot com bubble. So have a hawk's eye on the price movement of Intel..with a strong balance sheet and sitting near the top of its industry, if Intel can't pull it off, no one can.