[INTC] accelerates downward from the neckline, clear breakdown.

To recap on my Intel model, in this post from November 20 2014 I provided the following model for Intel shares.  It showed an expanding wedge that was wave 5 (last wave) of a larger expanding wedge. Fractal omnipresence in herd movements is an essential component of the Elliott wave principle.  Somewhere in that blue circle I expected the big downturn to occur which would eventually break Intel shares down below the lower rail.



As I often do after presenting a high level model, I then provided a zoomed in model.  For most people the high level model should have been enough but of course I find it interesting and sporting to track the herd, best as I can under the EW rules, down to their exact last steps in a current trend.  To that end, in this post from the very next day in Nov 2014 I was still looking for somewhat higher prices on Intel with a best case peak in the $40 range.



Days later, on Dec 2 2014, I updated the expanding wedge within expanding wedge model and narrowed down the final peak as shown in the model below which is reproduced from that post.  It clearly and unambiguously predicted a peak of $38. 



 That turned out to be a good model as we can see from the current high level snapshot below.  As you can see, from that peak we got 5 waves down into red 1 and then 3 back up into red 2.  Red 2 was a nice backtest from below of an important trend line.  When red 2 failed to break out, the shares turned down hard.

Of course I have been posting on the progress of this breakdown on a regular basis since the peak, never wavering from the top level model.  When Intel caught a strong bid on the deep vee second I began to see that this was likely going to be a head and shoulders formation as first identified in this post in which I provided the model below.



Fast forward to today.  In yesterday's backlink I noted that the neckline had not only been broken down but now it was backtesting from below.  In today's update we see a clear rejection of the breakout attempt and an acceleration downward. 

At the same time, 5 green waves have completed or nearly so and that suggests an a-b-c bounce is likely in the cards per the red path below.  Additionally, the recent movement filled the gap as shown and this is a common support point.  So it is quite possible that the market can treat this whole move as a big falling wedge an in this case we could see the blue path play out.  For now, red is my primary path. 

Unless this does something unexpected such as gapping lower next week I'll probably dump my Intel Jan 16 puts,  which I bought too early and have been red for a long time, since they are finally green again by a small 9%.  In that case I will load up on the Jan 2017s after the 3 wave retracement to ~$30 because 3 of 3 would be next.

I want to say again for the record that my current model is for an Intel collapse to $8 by 2017.  I will reserve the right to revise that view if the coming bounce is something more than an a-b-c to the prior 4th.