Microsoft still has room to fall, judging by the way sellers crushed the midpoint Hidden Pivot support at 423.21 on Friday. The pattern is gnarly enough to qualify as experimental. Even so, it is a well-established rule of the Hidden Pivot Method that price action at p is definitive regardless of the quality of the pattern. Since there is no ambiguity about the decisiveness of p's penetration, we can reliably conclude that d=380.10 is a very good bet to be reached. Nevertheless, if the stock were to reverse and touch the green line, the gyrations within the pattern's b-c leg make a 'mechanical' short there less appealing than we should prefer.
test post - ignore The chart makes clear not only that MSFT will achieve the 467.56 target shown, but also that it will form a tradeable top there. The target represents a slight adjustment made possible by the precise pullback from the midpoint Hidden Pivot (p=432.79), and by the profitable buy signaled on the pullback to the green line. This means the pattern is working, and that the 'D' target at 467.56 will have tradeable consequence in both directions. A pullback to the secondary pivot (p2=432.79) could be bought with a 421.20 stop-loss, although a 'camo' trigger is suggested to shrink the implied risk of more than $11 per share.
The chart makes clear not only that MSFT will achieve the 467.56 target shown, but also that it will form a tradeable top there. The target represents a slight adjustment made possible by the precise pullback from the midpoint Hidden Pivot (p=432.79), and by the profitable buy signaled on the pullback to the green line. This means the pattern is working, and that the 'D' target at 467.56 will have tradeable consequence in both directions. A pullback to the secondary pivot (p2=432.79) could be bought with a 421.20 stop-loss, although a 'camo' trigger is suggested to shrink the implied risk of more than $11 per share.
MSFT swam against a heavy tide Friday, apparently because Bill Ackman ann0unced he has built a $2.1 billion stake in the company. That's chicken feed relative to MSFT's immense cap value, but it was manifestly enough to touch off a headless-chicken scramble of short covering. The pattern within which the stock's 3% rally occurred is bullish and projects to 464.66, a 10% move from here. I have my doubts the stock deserves that kind of mark-up, but I will not let this bias cloud my judgment if buyers tear through the midpoint Hidden Pivot at 431.34, That would imply 'D' is likely to be reached, which, given the company's premier bellwether status, would have bullish implications for the stock market as a whole. _______ UPDATE (May 21, 8:50 a.m.): Far from tearing through the 431.24 pivot, the futures retreated $20 after exceeding it slightly. Yet another attempt (the first failure was on May 7) would imply the rally off the 356.28 low recorded on March 30 is merely corrective and unlikely to exceed the 464.66 target of the upwardly corrective pattern. New record highs are therefore unlikely coming any time soon.
A bigger picture stretching back a year projects as high as 666.84, but we'll stick with a smaller pattern for now that offers better form and clarity. It has signaled a move over the near term to as high as 464.66, but this has yet to be affirmed by a move through the midpoint Hidden Pivot (p=431.34). That number can serve as a minimum upside projection for the week ahead, as well as a tool for positioning a 'mechanical' buy if the opportunity should present itself. As always, a decisive push past p would shorten the odds of achieving D.
Microsoft has had a strong move off March's 356 low, but the monthly chart makes it look feeble. True, the stock's steep descent tripped a 'mechanical' buy at the green line (x=408.52). However, I don't expect the bounce to get much further than the midpoint Hidden Pivot resistance (p=472.25), if that far. I am no fan of head-and-shoulders patterns because they are everywhere one cares to find them, but it is not difficult to imagine a picture-perfect right shoulder forming. Regardless, the pattern as is should serve our need to keep close track of this crucial stock-market bellwether.
This week's chart is so fraught with significance that merely talking about it could create a problem for us, albeit a metaphysical one. First, I will refrain from typing the price associated with the red line, since that would almost surely queer the likelihood it will work as intended. It will work nonetheless, to the extent it tells us with high reliability whether Microsoft is on its way into the stratosphere. This information will be invaluable, since the stock remains the most dependable bellwether we have for the bull market. Is MSFT going to the 556.06 target, or will it instead get stopped dead at the midpoint Hidden Pivot? We shall see. I am quite sure, though, that I have chosen the correct pattern, for one reason: there are no alternatives -- i.e., two of the three coordinates are 'locked', and the third is a glow-in-the-dark choice, if not absolute. I doubt that hundreds of subscribers can keep a secret, but that's what I will ask. Please don't discuss this chart outside of the chat room or disseminate it to outsiders. For trading purposes, your bias should be bullish at least until the red line is reached.
Try as they might, the slimeballs charged with goosing this cinder block whenever it needs a cash-free boost have succeeded only in recouping about a third of bear-market losses sustained since last autumn's top near 550. To be sure, the rigged, gap-up openings that accounted for nearly all of last week's 60-point (15%) gain generated a powerful impulse leg on the daily chart, and it must be respected. But we'll make bulls earn our trust every step of the way, and that means with a leap either Monday or Tuesday that surpasses the gap resistance at 442.50 created in January on the way down. I will continue to track the stock closely, since, despite its ugly slide over the last six months, the company remains the most reliable bellwether for gauging the health of the stock market.
The bearish outcome shown in the chart goes a step further than can be confidently predicted, but it is supported by the pattern itself. Make no mistake, a further fall to the green line would trigger a 'mechanical' buy with excellent odds of success, but only of a limited kind. That implies that a bid there, stop 356.57, is likely to reverse back up to the red line, the 372.25 midpoint Hidden Pivot. Some shares could still be held above it for a play to d=387.92, but I'd suggest taking profits on at least half the position at p. The nearly 8-point stop-loss on entry should be pared down with a camo trigger.
MSFT's dip on the opening to the green line triggered a 'mechanical' buy with the potential to reach 387.92. Bulls were halfway there on Thursday when the stock closed above the red line, a midpoint Hidden Pivot resistance at 372.25. If it can do it again on Monday, that would make further progress to the d target all but certain. I have shown only a portion of the bullish pattern for proprietary reasons, but it is an rABC that meets all my rules. I still expect the stock to fall eventually to 332.67, which implies that this rally should be shorted aggressively at 387.92, albeit with very tight risk control.
