If Intel and some of the other high tech large caps just finished an extended 5th. wave as we expect may be the case given their longer term Fibonacci rhythm (even overshooting a bit basis Intel and Cisco, the two yet-to-be broken darlings), then a typical tendency of Elliott analysis is that the extended 5th. wave will get retraced twice. Basis Intel, this would mean a move all the way back down to around the 89-93 region, before a fierce bounce back to approximately 128, before ongoing weakness thereafter. We depict such a path below basis the monthly chart.

Graph produced with Advanced GET End-of-Day,

If however, we are simply doing a sloppy 4th wave retracement (a possibility to be sure, although not our favoured count), then we should still decline in a Wave C to approximately 116, depicted below basis an hourly chart.

Graph produced with Advanced GET End-of-Day,

Either way, Intel is likely to experience an ugly move down from here, and we will simply wait to see how the price action plays out toward 116 before labeling more definitively which count it will be.

The high tech large caps are the last of this bull market's darlings to fall, but their time appears to have arrived to at least test the complacency of the American public. Last week's Internet decline was not enough to do so thoroughly, but between now and mid-May we are likely to do so in a more definitive fashion.

Intel's ascent in December-January-February all seemed so easy and natural to the popular media of course, but CNBC is likely to soon be shouting Armageddon when we get two months down. Needless to say, ours is now a society of constant media hype. The true bear market will only be upon us when the lawsuits of tomorrow start coming at CNBC a la the Tobacco company cancer suits of today.

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