I had the feeling the markets would be weird today and tomorrow. They didn’t disappoint me (except for the results):

F: -0.32 to $15.95 (-1.97%)–bought at $17.125
INTC: 0.00 to $21.46 (0.00%)–bought at $18.52
JUBAX: NA to $10.75 (NA%)–bought at $10.17
SDOW: -0.61 to $38.63 (-1.55%)–bought at $39.26
SPXU: -0.41 to $18.05 (-2.22%)–bought at $17.57
SQQQ: -0.39 to $28.40 (-1.35%)–bought at $28.75
VXZ: -0.57 to $58.08 (-0.97%)–bought at $58.00

OVERALL: -1.02%

I must admit, I was quite impressed with Intel (INTC) today. If ever a stock had a reason to drop, that was it, yet it still finished at even.

Intel reported a design flaw in one of their chips today, which caused their stock to stop trading. According to Yahoo Finance:

As part of ongoing quality assurance, Intel Corporation has discovered a design issue in a recently released support chip, the Intel® 6 Series, code-named Cougar Point, and has implemented a silicon fix. In some cases, the Serial-ATA (SATA) ports within the chipsets may degrade over time, potentially impacting the performance or functionality of SATA-linked devices such as hard disk drives and DVD-drives. The chipset is utilized in PCs with Intel’s latest Second Generation Intel Core processors, code-named Sandy Bridge. Intel has stopped shipment of the affected support chip from its factories. Intel has corrected the design issue, and has begun manufacturing a new version of the support chip which will resolve the issue. The Sandy Bridge microprocessor is unaffected and no other products are affected by this issue.

But the funny thing is that even with this news, they revised their 2011 revenue growth expectations upward (of course, they took a charge to their 4th quarter 2010 earnings…), although they revised their gross margins down a few percent:

The full-year revenue growth percentage is now expected to be in the mid-to high teens, compared to the company’s prior expectation of approximately 10 percent. Full-year gross margin is now expected to be 63 percent, plus or minus a few percentage points, compared to the previous expectation of 65 percent, plus or minus a few percentage points.

Intel still looks solid for 2011. I don’t see this as a reason to change my outlook for it, and I am not selling. If anything, I would call this an opportunity for anyone who doesn’t have Intel to buy it.

I have added a sell limit order on iPath S&P 500 VIX Mid-Term Futures ETN (VXZ) of $104.32, which is the 52 week high on it. I honestly don’t expect it to reach that high, but I will be delighted to sell it if it does. However, I expect to sell it later this week regardless.

1. You didn’t think I would do anything without discussing Egypt, did you?

Here is a fact to keep things in perspective: According to the International Monetary Fund, Egypt’s GDP in 2010 was $216.83 billion. By comparison, Greece is worth $305 billion in GDP. Exxon’s market cap is $398 billion. In other words, if something went wrong with Greece or Exxon, we would have bigger problems.

Mind you, I am not diminishing the importance of Egypt politically. Egypt’s peaceful relations with Israel have helped to keep a cap on Middle Eastern tensions. But even if the Middle East turned into a war zone tomorrow, do you honestly think the world’s developed nations wouldn’t be in there the next day to fix things? Heck, even China and the U.S. would find common ground to take action together.

2. Speaking of Exxon, their quarterly profits went up 53%. Top that, Jed Clampett…

3. If you can pull yourself away from news about Egypt, there will be some important economic reports this week, with U.S. jobs taking center stage:

TUESDAY: Auto and Truck sales.
WEDNESDAY: ADP’s Employment Change.
THURSDAY: The weekly unemployment claims will stand out just a little more this week, because on…
FRIDAY, we get the unemployment rate for January.

4. In other U.S. economic news, personal income was up 0.4% in December, but personal spending was up 0.7%. Core PCE prices were unchanged. All in all, a net positive month. This is why I think we are in a market correction, and not a full-blown bear market.

After a day like today, you folks need an open thread. And what better song to lead it off than Tom Petty’s Free Fallin’?

If music videos aren’t your thing, maybe a good cartoon?

Enjoy your weekend!

No, it is just the end of the week, not the world. Although I can forgive anyone for making that mistake, after today’s horrendous market action.

F: -2.52 to $16.27 (-13.41%)–bought at $18.05 and $16.20 today for a new dollar cost average of $17.125
INTC: -0.29 to $21.46 (-1.33%)–bought at $18.52
JUBAX: NA to $10.93 (NA%)–bought at $10.17
SDOW: -0.01 to $39.24 (-0.00%)–bought at $39.259 today
SPXU: 0.92 to $18.46 (5.25%)–bought at $17.57
SQQQ: 0.04 to $28.79 (0.14%)–bought at $28.75 today
VXZ: 1.79 to $58.65 (3.15%)–bought at $58.00

OVERALL: -0.72%

Now for the final piece of the trio, the Nasdaq. For that one, I am adding Proshares Ultra Pro Short QQQ (SQQQ) with a limit buy order of $28.50.

UPDATE: I chased it and got it at $28.75.

Have you noticed how the Dow Jones Industrial Average is having a hard time breaking 12,000? With the coming correction, the Dow will fall too, so I am adding Proshares Ultra Short Dow 30 (SDOW). I have a limit buy order at $37.02 before the open.

UPDATE: I took my wife out for breakfast and shopping. I get back and see that I missed the boat on SDOW. So I raised my price and got it at $39.259.

I am removing my stop loss orders on both Ford (F) and Intel (INTC). I have decided that I got them both cheap, and I would rather buy more of both of them in a correction than sell them. I got them both cheap, and if I can buy them at a cheaper price, I will. But they are both undervalued now. Just look at their PEGs (anything under 1.00 is undervalued compared to estimated growth):

Ford: 0.77
Intel: 0.95

There just isn’t a lot of downside to these two stocks. Since I have over a 50% cash position at the moment, I can easily afford to add to my positions on these stocks.

Speaking of Ford, their earnings will be out at 7 am EST today.

UPDATE: CNBC is reporting that Ford missed EPS estimates but exceeded on gross revenue.

UPDATE 2: I added a limit buy on Ford at $16.20 before the open. I honestly didn’t think it’d go through. Oh well, now I own more Ford.

1. With the Dow flirting with 12,000, here is some recent history for you (from Bloomberg):

More U.S. stocks are trading above their 200-day average price than any time since April, when the Dow began a 14 percent slump. The cost to insure against Standard & Poor’s 500 Index losses has fallen to an almost three-year low.

Time to buy some SDOW maybe?

2. Get well soon, Bud Fox. As much trouble as Charlie Sheen gets into in his personal life, I must admit I have always enjoyed his work. And I do count Wall Street as one of my favorite movies of all time, certainly the best movie ever made about Wall Street.

3. Even with all of the problems in Egypt, I still don’t see this as a sign of things to come in the broader Middle East. However, the poorer countries in the region should be on notice, as Yemen sees protests too. But don’t worry, this shouldn’t affect the world’s economy. These stories make nice headlines, but as Shakespeare would have described it, “it is a tale told by an idiot, full of sound and fury, signifying nothing.”

4. As gold and silver have been tanking lately, platinum and palladium have been cruising merrily along. Keep in mind that platinum and palladium get most of their demand from industry, not investors. I won’t advise anyone to run out and buy them as they haven’t appreciated that much, but they do make a safe place to keep your money in uncertain times.

5. Initial U.S. GDP numbers for the 4th quarter are due out at 8:30 am EST. Expected: 3.5-3.7% annualized growth. If this number disappoints, we could see our correction sooner than expected.

6. Remember the internet rumors about Ireland printing 51 billion euros without ECB authorization? According to Bloomberg:

Figures published by the [Irish] central bank this month showed it lent as much as [51 billion] in euros, equivalent to $70 billion, to commercial banks. Unlike the 132 billion euros the European Central Bank is using to prop up the country’s financial system, the government may be on the hook for it.

Erin go broke?