It was July 2009. Pessimism ruled the day and the equities market looked vulnerable. That is until Intel (NASDAQ: INTC) reported earnings for its second quarter and knocked it out of the park.

The semiconductor giant gapped up 7% on July 15, 2009 and sparked a relentless multi-month surge in the broader market, and in the options trading arena. Many bears probably still rue the day that Intel doomed them to yet another multi-year stretch of hibernation. While the groundwork may have been laid for the end of the bear in early 2009 with the vicious V shaped bounce off the 666 level on the S&P 500, the Intel induced rally is likely what turned the bounce into a bottom.

Fast forward to our current market and lo and behold INTC has done it again. Yes, we’re at a different time and a different stage of a bull market, but INTC earning’s reaction was eerily similar to Q2 of 2009.  Its earnings gap from last week was also around 7% and has thus far sparked a rally in the broader market. While it may not have triggered as monumental a shift as in 2009, the S&P 500 was in a precarious position following last Monday’s bearish reaction to the news of the U.S. debt outlook being downgraded. The positive Intel earnings caused a swing in the market sentiment pendulum from pessimism to optimism.

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When it comes to earnings releases and market movers, Intel has established itself as a company that must be watched.

In the short term INTC has gotten decisively overbought. Since the day before its earnings we’ve seen a virtually uninterrupted 15% rise in price. Now may be a strategic time to ring the register or at least tighten stops if you’re a shorter-term trader. Longer term stock owners seeking to reduce their exposure may consider selling the INTC June 23 Covered Call.

(Source:  MachTrader)

At the time of this writing Tyler Craig had no position in INTC.

Follow Tyler Craig on Twitter@TylersTrading.