[INTC] update

Contrary to my prior posts, the 2 horsemen of tech have continued skyrocketing into the end of this Ponzi.  They are displaying wild optimism (as is FB in the AH today) even though their prospects are not nearly so bright.  For Intel's part, halting construction on a fab and re-purposing its tools elsewhere means that fab will not be built for a long time, if ever.  For Microsoft's part, they didn't just lay off 18,000 people for the heck of it.  These companies are ignoring the share price and minding their business.  Clearly there is divergence between the share price and what the company heads are saying.

In any case, I'll take yet another crack at Intel.  This one is pretty easy.  Short now at $34.50 with a cover trigger of $34.90.  That's 40 cents risked vs many dollars of possible gain.  All of the recent buying of Intel and Microsoft have been wild speculation done very late in the game - a sure sign that the retail investor is at work and probably margin-ed up the wazoo to make up for lost time.  Well, the chart is against them at this point.  When playing a game of odds, you want the odds on your side.  The chart does not favor longs by any stretch.

The big picture provides lots of insight given that it is so late in the boom.  When you have a puzzle with few pieces it's very hard to discern what the picture is but when you are down to the final pieces it becomes much easier to see.  EW is no different in that regard.  Since 2000 INTC has been in an expanding wedge 5th wave. When it bottoms the next time around $8, buy with both hands. After such dramatic losses that might not even be related to bad company earnings, nobody will trust the markets at that time.  I cannot say why trust could be lost.  It could be anything from a dirty bomb on Wall St (let's hope not and, no you dumb asses at the NSA, I am not planning a dirty bomb!) or it could be some political event or it could be a big war or many other factors that cause people to lose faith in stocks.  But the chart says it is likely to happen and so I'm guessing some reason will emerge that will seem to make sense to the herd at the time.

Look at how this wave retraced back to the level of the prior 4th (it is not marked but lies to the left of blue 2).  Coincidence?  Perhaps but unlikely IMO.


By the way, look at how this final wave is an expanding wedge inside an expanding wedge.  Black 1-5 have 5 rail bumps in an of themselves.  But in order to make that top rail bump, wave 5 itself had to have a dramatic move up and expanding wedges are perfect in that role.  The blue lines show the rails and the red numbering shows the internal wave.  If all this seems doubtful, look at how quick and thin that last wave up was.  There is no conviction buying there.  There is no depth to that bid.  That little spider leg of a wave cannot support any weight at all.  Look at blue 2, it was the same thing.