[INTC] update - Intel likely soon to plummet.

In the backlink and in several posts leading up to it I modeled Intel as likely forming a head and shoulders pattern.  In fact I wrote that, "it needs to start heading down almost immediately" for the H+S pattern to be a viable option.  Today it gapped down and then closed down 3% on the day which is a pretty big number for these senior shares.  Additionally, it did so on 42mn shares with normal volume being 28mn.  A falling right shoulder on rising volume = increasing likelihood that the neckline will not hold and the shares will plummet.

I doubt that Wall st will begin a big sell off going into the holiday weekend as this would be very, very uncommon (and bearish) indeed.  More likely, the traders come back after the break and then start selling.  In fact, given that I'm modeling Intel to enter 3 of 3 down I expect this will be attended by some significant amount of panic.  If there ever was a technical setup to buy Intel puts, this is it.  You have a high chance of entering a 3rd of 3rd which would also trigger a H+S breakdown.  If things play out per my model, the market will not just take this like it was nothing folks.  I have seen euphoria in the markets disappear faster than a cloud can cover the sun.  When this euphoria ends people are going to become downright gloomy about the markets (and many other aspects of life as well).  Intel is not just a bellwether for tech.  It is a bellwether for retail as well.  If Intel goes down, lots of stuff will follow.

Of course, nobody knows the future, its all about odds and not about certainties, blah blah blah.  There's always some damned fool who feels lied to if he doesn't hear the obvious and permanent disclaimer and then the model doesn't hold (even though I have probably written this disclaimer 50 times in the past 5 years).  Yet these same damned fools bet their own money on information that they received for free from a someone who's not even a financial adviser.  If they win the bet, they are geniuses for finding my blog and for being able to read.  If they don't then all this charting stuff is a complete load of crap and, damn it, why can't I do a better job of predicting the future?  Sorry for venting a bit folks but some of the side channel communications I get show a high degree of entitled liberal attitude (and they know who they are).