Monday, March 30, 2015

[INTC] update

At the backlink I provided this model:

Here's the recent snapshot whicheven completed the little final spike down into blue 5 that I modeled would happen and since has bounced to $33 for a microsecond (i.e. enough to satisfy the EWP requirements but not enough for anyone to actually sell anything at the $33 price point) in what is so far a 3 wave movement.  In fact, it is much more than a 3 wave movement as this chart includes extended trade (read low volume) transactions. This is why the vertical is double wide, there is more than one stroke in there.  But for now I think it likely aggregates into an a-b-c to about the level of the 38.2 fib.

If this model continues to be right then a trap door is about to open up underneath Intel shares.   If Intel down drafts like that, and I believe that they will, the broader markets will not just ignore it.  If Intel is hurting, the consumer is likely clamming up and it will not be long before recession begins.

I want to say for the record that the stock market is emotionless.  During the boom, it just kept going up and up and up to an almost sickening degree given the PE expansions, margin debt expansion, share buybacks not only using cash but also in many cases, using debt, all fueled by the idea that the Wizard of Ozt actually controls the economy.  Folks, I cannot say it any more clearly: a con looks real until it doesn't and then everyone wonders how they were ever fooled by it in the first place.   When this scam lets loose to the down side it is going to be sickening in a negative sense.  It will just keep falling and falling and the more someone says the bottom is in the harder it will fall.

Some will say they never saw it coming, others will say they saw some signs but ignored them, others will be very loud and liberal and shouting for the Fed to save us again (Krugman et al.) but none of it will change anything.  As exuberant things seemed to the upside, so will they seem dismal, depressed and hopeless to the downside when the recession turns into a depression and everyone thinks hope is lost.  Reversion to the mean is going to be very, very mean.

This will be the time to be on your guard against government USING the opportunity to wage war which is always viewed as economic stimulus for the monied elite.

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