Friday, July 27, 2018

When stocks react differently than the fundamentals expect [INTC]

Many people think that the so called fundamentals rule stock prices in real time.  Those same people are slow to figure out that the fundamentals are only a factor in the calculus and that emotion is a much bigger factor.  Nobody wants to get caught holding the empty bag when the Ponzi finally goes bust.

Case in point is the Intel chart (and others like facebook, twitter, etc.).  Here is a comment from the Intel stock chat board on Yahoo finance.  The name has been scratched out to protect the deluded.  This person is watching the shares sink by 8% today on supposedly good news and he thinks there is "nothing to see".  He suggests that the since bears have been wrong for years, they will always be wrong.

But on my paid subscriber blog, here has been my wave count for Intel for some time now.  It predicted that this expanding wedge had topped at blue [5]:

In case today's breakdown is difficult to see, here is a zoom in.  It broke down both the top rail of the expanding wedge and of the smaller rising wedge which made up blue [5] and it did so with gusto and in one fell swoop:

This is an incredible amount of technical damage.  Also, look where that recent peak stopped at.  It was essentially a gap fill for the dot bomb collapse that the fed never allowed to fully express itself.  Well, the new conservative fed is less concerned for saving the stock market than it is for saving the US banking system and these low rates were doing nothing but piling up bad debt on the balance sheets of the banks.

This sell off will not be confirmed to be stockmageddon until we see 5 down from the top and then three back up and then 5 more down to a lower low.  But with major Wall St darlings catching no bid and dropping 20 percent in a single day it sure looks like stair steps up is over and elevator down has begun.

1 comment:

Augustine said...

If stock prices were driven by fundamentals, they'r remain steady throughout the quarter until the next quarterly results were announced. Alas, even rumors don't count as fundamentals.

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