[INTC] update - options people, this should interest you.

In this post I pointed out that Intel shares had traced out a massive expanding wedge since 2009.  What should be interesting to options players is that if this model is right it means that the Intel collapse will come fast and furious.  Why?  Because that is what you get with the 5th wave of an expanding wedge.  It essentially says that the leverage in play on Intel shares has been growing over time.  Each growth wave is 3 waves as is each retracement.  That's just a feature of most triangles (there are EW exceptions) and a wedge is an expanding triangle.

The wave following the 5th is not a 3 wave move but rather a full 5 wave impulse.  These factors should move the price quickly per unit time which is what makes options fly in value.  In the model of the prior post I pointed out that the Intel chart finish could be fractal in nature.  In other words, the 5th of C could be an expanding wedge just like the whole chart segment since 2009.

At the time, the shares were at $33.95.  Today they closed at 35.95, just one small dollar from my model price target of $37.  That rapid move shows what can happen inside an expanding wedge!  But when the shares reverse there will be no support; it will be in freefall.  Only complete fools who cannot read a chart are buying this peak; it is a short seller's dream setup and you can bet I am not the only one who sees it.

Well, this think might have another dollar or two left in it but it could also be done right here.  This chart has maybe a day or two left before it turns down.   I am going to really look into buying some Intel puts tomorrow.  I plan on buying two strikes.  The first ones I get will be the longer term Jan16 25s.  The bid, ask and last are above on the chart.

The second strike will be the April 15 24s.  Since I last posted they have fallen in price even more due to the 5th wave wedge moonshot that occurred.  I'll probably get half a tranche tomorrow and then wait to see if the chart will throw over the top rail so I can buy the other half tranche.

I'm telling you, this will not end well for Intel longs.  That wedge in the 5th of C position lends very high probability that it is the end of the formation.