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Halftime Report: 'It's All About What Intel Says Tonight'

Nervous investors were closely watching action in Intel , which hit a 52-week high just hours before the tech titan reports earnings, Tuesday after the bell.

As the world’s largest semiconductor company, Intel results will likely set the tone not only for tech – but possibly the broad market -- for the rest of earnings season.

“It’s all based on Intel tonight,” says Pete Najarian.

Chip companies are generally seen as good economic indicators because chips are one of the first things ordered, as other companies build more computers, smartphones and/or gadgets due to increased demand.

What must you know about Intel earnings?

Intel is a major market ‘tell’, explains Brian Kelly of Kanundrum. But they’re priced for perfection. Now it’s all about their guidance and I think it needs to be exceptional for this stock to go higher.

Options traders seem to be very bullish on this stock, counters Fast Money trader Pete Najarian. I’m seeing dominant call activity. That suggests investors expect even more upside from the guidance coming out tonight.

And Intel is tied into so much, reminds Patty Edwards of Storehouse. Like we mentioned above, they’re linked not only to the smartphone market but the launch of Windows 7. What they say will likely be a tell for many, many other names.

It seems to me that not only Intel but all tech stocks are at an inflection point, adds Greg Troccoli of Opalesque. From a technical perspective, the Tech ETF is at key resistance levels. This is make it or break it time.

Intel Track Record
EPS Beat Rate: 59%
Average % Change: -1.2%
Source: Bespoke Investment Group

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MEREDITH WHITNEY DOWNGRADES GOLDMAN

Widely followed analyst Meredith Whitney amplified market jitters on Tuesday after she downgraded Goldman to ‘neutral’ from ‘buy” citing valuations, though her outlook for the company remained bullish.

What’s the trade?

I’m with Meredith, says Christopher Zook of CAZ. I think they’re priced for perfection. Goldman has moved from 80 to 190. If things start to get rocky again I think the tone changes and I’d be taking profits. If nothing more, buy protection. I think we’re looking at a classic situation of buy the rumor and sell the news.

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JOHNSON & JOHNSON DRAGS DOWN SENTIMENT

Johnson & Johnson dragged down sentiment on Tuesday after their third-quarter sales disappointed investors and stirred doubts about the strength of the latest earnings season.

What’s the trade?

I love the diversification in JNJ, says Pete Najarian. It’s a solid performer but I never expect it to scorch to the upside or the downside. Valuations right now look good to me. Personally, I’d play it with out of the money calls.

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OPTIONS ACTION: ITT

OptionMonster Jon Najarian has spotted unusual options activity in ITT – two months worth of volume in one day.

The numbers of calls traded suggests to Najarian the stock could make a significant move higher. It’s worth noting that ITT is the subject of takeover rumors.

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CALL THE CLOSE

Pete Najarian: I think the market goes higher.

Patricia Edwards: I’m out.

Greg Troccoli: I’m a seller.

Christopher Zook: I’m a seller.


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Trader disclosure: On Oct. 13th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (UNG); Finerman's Firm Is Short (USO); Finerman's Firm Is Long Puts & Calls (MDY); Finerman's Firm Owns (BAC), (BAC) Calls, (BAC) Call Spreads, (BAC) Preferred; Finerman Owns (RIG), (PDE); Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (MSFT), (TGT), (PDE), (BRCM), (WMT), (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WLP) Calls; Terranova Owns (JPM), (JOYG), (NOV), (GS); Terranova Is Short (GRMN), (CCL); Terranova Owns Dec. 2009 Gold Futures; Terranova Owns Dec. 2009 Crude Oil Futures; Terranova Owns Dec. 2010 Crude Oil Futures; Terranova Works For (VRTS); Najarian Owns (BRCD) Calls; Najarian Owns (C) Calls; Najarian Owns (DELL) Call Spread; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (GE) Calls; Najarian Owns (JPM) Calls; Najarian Is Short (JOYG) Calls; Najarian Owns (LAZ) & Short (LAZ) Calls; Najarian Owns (MYL) Puts; Najarian Owns (TEVA); Najarian Owns (YHOO) Call Spread

For Zack Karabell
Karabell Owns (FCX)
Karabell Owns (UTX)
Karabell Owns (HON)
Karabell Owns (SINA)
Karabell Owns (EDU)

For Brad Hintz
Hintz owns an Equity Position in (MS)
Bernstein Owns (GS)
(GS) Has Been A Client of Bernstein In Past 12 Months
Bernstein Owns (MS)
(MS) Has Been A Client of Bernstein In Past 12 Months



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