Microsoft

Just a small push this week will bring AAPL up to the green line, where it would become a promising 'mechanical' short. I would expect a profitable pullback to at least the next level, p=187.47, but I doubt the stock is ready to fall into the abyss. To remind you: The green line (x=193.54) is not a support, resistance, Hidden Pivot or target, just a place at or near which we sometimes initiate trades.  We'll look for an opportunity to do so with a risk-averse 'camouflage' set-up when the stock reaches the line, presumably on Monday if Friday's nutty wilding spree continues.

I've included MSFT on the list this week because the bearish pattern shown offers as much certitude as AAPL's.  The initial plunge through the red  line on December 4 not only 'guaranteed' a further fall to at least D=352.89, it also made the 'mechanical' short  at the green line on December 13 an almost certain bet. The situation should be good for a winning option trade on the way down, but if the best opportunity should involve naked shorting, I'll provide more detailed guidance in the chat room on request.

Microsoft is the Hillary Clinton of the computer world, moving up the success ladder by lying, extorting, cutting the throats of competitors and exercising unfailingly poor judgment. We are all familiar with Hillary's story. But for Microsoft, it began with Bill Gates' lowball buyout of DOS from its inventor, followed by a con-job of IBM to secure royalty rights to the operating system. When Gates killed off Netscape by bundling Internet Explorer with every new PC and laptop, a complicit, congenitally stupid press didn't catch up with him until after he'd crushed Netscape and its founder, Mark Andressen. Now, just like Hillary, Microsoft is acting more brazenly than ever, sabotaging Windows 7 in order to push the PC world onto a Windows 10 platform that few want and no one needs. Click here for the sordid story in Forbes if you think I've exaggerated. Despite all of this, or perhaps because of it, Microsoft shares have soared into record territory and look primed to move even higher.  From a technical standpoint, assuming they get past a Hidden Pivot resistance at 58.51, the next target above it would be 65.16.  Jot down those numbers if you trade the stock or hold a long-term position, since either target could mark an important top. If so, it would likely be caused by the global rejection of Windows 10. Perhaps that's too much to hope for in a world where companies that do business ethically all too often wind up as roadkill. _______ UPDATE (September 4, 1:31 p.m.): Since peaking a week ago at 58.70, 19 cents above my target, the stock has receded to a so-far low of 57.30. The upside penetration of the target was not decisive, but that's what it would take to put the 65.16 target in play. No one

Proving that too much of a bad thing is never enough on Wall Street, Microsoft has taken a leap in after-hours trading Thursday on word that revenues and profits fell in the last quarter. It would appear that the same dolts who overestimated Amazon's earnings underestimated Microsoft's.  In the Bizarro  stock-market world, as we know, it is not important whether companies make money or not, but whether they beat analysts' estimates. This attitude has long prevailed in the sports-betting world, where it's not win, lose or draw that matters, but whether a team covers the point spread. In Microsoft's case, it helped that the company was able to move a hundred million saps from Windows 7 to Windows 10, a change that is about as useful and necessary as upgrading the knobs on one's car radio. From a technical standpoint, the rally looks like it will sputter out shortly at p2=56.94, or D=59.55 if any higher. A tightly stopped short from either pivot is suggested. _______ UPDATE (February 3, 2:34 a.m,): The stock is falling without having gotten any higher than 55.09.  A print below 50.30 now would be especially bearish.

Shares of Microsoft, the company that gave us Zune, Windows Me and Microsoft Kin -- surely your remember their social networking phone? -- are in a parabola so steep you'd think the company was about to introduce WinCancerCure.  I've mentioned MSFT in The Morning Line today as one of the very few remaining stocks providing market leadership.  The fact that it has punched through a very long-term 'secondary pivot' at 51.98 is evidence that it could run up as high as 64.35 before the bull market has run its course.  Assuming this forecast proves correct, it's doubtful the broad averages would begin to fall before the Fat Lady from Redmond has sung. Indeed, this stock is as reliable a bellwether as we could track to discern the mood on Wall Street.  It would be incredible if such a monster-cap stock were able to hit 64.35 before New Year's Eve -- a 16.5% run-up from here.  If so, it will be time to reef the sails.  Traders please note: MSFT would become a 'mechanical' buy on a pullback to 51.98, stop 47.85. _______UPDATE (December 20): Even though the stock got creamed on Friday, the selling stopped short of generating a bearish impulse leg on the daily chart. That would required a print at 53.25 -- 78 cents beneath the intraday low.  Let's see if bulls can hold that line as the new weeks begins._______UPDATE (December 29, 8:36 p.m.): Bulls more than held the line -- they pushed the stock nearly 6% higher in a little more than a week. My immediate target is 57.15, a Hidden Pivot where I expect a tradable top to form. _______ UPDATE (January 4, 9:54 p.m. EST): The rally died 30 cents shy of the target. This is mildly bearish, but let's wait to see more

Microsoft's swift 10% plunge recently prompted someone in the chat room to note that it cannot be good for the market as a whole. Agreed, although from a technical standpoint it should be noted that the stock could fall a further 10%, to 24.30, without negating the bullish impulse leg that ended with early March's peak at 32.95. My strong hunch is that MSFT is headed down to at least the 22.05 midpoint support of the big pattern shown. That pivot is tied to a 'D' target a 11.10(!),which at this point seems farfetched. Nevertheless, and as far as I'm concerned, Windows 8 has the potential to be the biggest disaster in the company's history -- a product that would seem to hold no appeal whatsoever for business users, let alone a reason to upgrade from Windows 7. We shall see. In the meantime, we should endeavor to catch a ride south from the top of the next rally, since the subsequent downdraft could be a 20-percenter for shorts. Given Microsoft's huge cash hoard, acquiring shares below $20 would be like buying dollar bills at half-price. Is there a possibility that the company's spare tens of billions are parked in an unsafe place?  If so, the epiphany awaits that will reveal the $2 trillion surplus held by U.S. corporations to have been as ephemeral as our banking system's alleged reserves. [This just in: A ComputerWorld article calls Windows8 a "strategic mistake," and a "Jekyll and Hyde operating system that is weak on tablets, terrible on PCs."  Click here.]

[Our friend Doug Behnfield, the savviest financial advisor we know, is skeptical about the dividend mania that has captivated Wall Street of late. In the essay below he explains why investors seduced by dividend-paying stocks may be overlooking more-than-offsetting risks and better opportunities. Doug works exclusively with high-net-worth individuals, many of whom are undoubtedly grateful for his prescient skew toward Treasury paper since the beginning of last year. To contact him about his services, click here and I will forward your message. RA] As you read this essay, keep Bob Farrell’s Rule #7 well in mind: "Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names." Most stock market participants can remember back to 2000 if they really try. It was common back then for typically risk-averse investors (like retirees) to be insistent that half of their portfolios consisted of Microsoft, Intel, Cisco and Dell. The price of each of these stocks had gone parabolic and none of them paid dividends, which was a good thing because that left them with all those earnings to plow back into their business. If the investor needed to buy groceries, they could just sell a few shares for cash flow. My, how things have changed. Today, "dividend paying stocks" are all the rage. McDonalds, Proctor & Gamble and Johnson & Johnson are emblematic. Apple has just begun getting into the act by declaring its first dividend and Intel and Microsoft are now on the list after ramping up dividends soon after the tech stock meltdown in the early 2000s. What these companies have in common is that they are blue chip names and they have taken on a "one decision" aura. For example, Proctor & Gamble has raised its dividend every year for 55

Groupon’s $700 million IPO last week proved that thieves and lunatics, working hand in hand and impelled by naked greed, remain a dominant force in today’s markets. With America rapidly on its way to becoming Nickel-and-Dime Nation, perhaps those who snapped up 35 million Groupon shares at huge premiums on opening day knew what they were doing? We were reminded of Groupon’s visceral appeal this morning when we opened a G-mail from them promising $5 off the next Groupon purchase.  Had we known this opportunity-of-a-lifetime would be sitting in our mailbox when we awoke, we would scarcely have slept the night before.  Imagine what the company would be worth if it can sell just one $10 Groupon to each and every Chinaman. If and when that happens, and assuming the Chinese don’t rip off the idea first, Groupon at $28 per share may turn out to have been a steal. Or perhaps not. There is always the chance that Google will come along, even before the Chinese have stolen the idea, and do it better themselves. Google, as everyone knows, does whatever it is doing better than just about any other company. That is why Microsoft’s Bing! search engine isn’t even in the race, despite ginned-up statistics that would have us believe the product is quickly saturating its market.  In fact, Bing! has gotten as far as it has only with a huge, artificial boost from Microsoft’s weekly laxative of security patches, gratuitous updates and other bitware effluvia. Turns out that one of those updates stealthily inserted a Bing! search field into Firefox’s tool bar, and that it takes a registry hack to get rid of it. (Warning: Half-measures will only allow Bing! to return again and again and again, like the proverbial bad penny.) If you want to know

We wish Google all possible success in taking on playground bullies Apple and Microsoft in a battle that has crucial implications for the use of patents to stifle competition. Google’s $12.5 billion purchase of cell phone maker Motorola Mobility, its largest acquisition to date, is a shot across the bow of more established competitors who would seek to throttle the search engine giant’s cell phone development and other promising technologies by suing them to death in patent court.  The Wall Street Journal recently detailed how high tech companies have been acquiring every patent they can get their hands on so that they stand a better chance of being predator rather than prey in patent litigation. Lawsuits over patents have become so ubiquitous that they are beginning to supersede innovation itself as the primary means through which high tech companies grow and prosper. In this respect, Google is the new kid on the block in head-to-head competition with firms like Microsoft and Apple that have been around since the 1980s.  As a relative newcomer to the technology scene, the company’s war-chest of patents was practically empty until recently. To play catch-up, Google has been on a tear acquiring patents directly or buying patent-rich firms outright, such as cell phone pioneer Motorola.  In late July, Google bought about a thousand pending and issued patents from IBM to build up its patent ammo. Many of these patents have little to do with the company’s core businesses of search and advertising. One reportedly covers ways of automatically adjusting a clock, and another deals with surface treatments for electrical contacts. In the hands of a company as innovative and aggressive as Google, every little patent helps to thwart other firms that would seek to stifle them. “As things stand today, one of a company’s best