I've set a bullish tripwire at 510.50, somewhat above current levels, to tell us whether MSFT is about to embark on a major leg up. If so, the stock market would likely follow, since Microsoft remains a key bellwether. This does not negate a 493.67 correction target where I'd intended to bottom-fish aggressively. But I'm not married to either scenario and would prefer to simply let the stock tell us how it's feeling rather than pretend we have a crystal ball. If MSFT climbs toward new highs, don't expect the ascent to be smooth. That's because the slimeballs who manipulate the stock trapped too many bulls (and short-covering bears) with July 31's lunatic leap to 555.
MSFT edged slightly closer to the 493.67 midpoint support featured here last week. It is my minimum downside objective, but also an excellent spot to attempt tightly scripted bottom-fishing. I've redacted the full pattern, since I'm getting tired of seeing appealing rABCs get front-run. Others are bound to discover this one, since it is hardly obscure. But it is sufficiently compelling to work, so stay with it.
My outlook is still bullish, with a 593.73 target in play that was introduced here last week. This chart offers a different view, however -- one that suggests the stock would become an opportune buy when the correction comes down to p=493.67, the midpoint Hidden Pivot of a pattern I've cloaked for proprietary reasons. You should use a trigger interval taken from the hourly to initiate the trade, but it cannot be calculated accurately until the stock is close to p. As of now, it looks like $2.08 TI should do the trick, but a more timely calculation could help to reduce that number. As always, a decisive breach of the midpoint support would shorten the odds of more slippage to the 'd' target -- in this case 431.89.
I've applied my very bullish interpretation of the S&P chart to Microsoft shares this week, producing an ambitious bull-market target at 593.79. This effectively shelves the question of whether the engineered, short-covering spike to 555.45 on July 31 marked a definitive top. It did not, as long as we give sufficient weight to the ease with which buyers surmounted the pattern's 469.26 midpoint Hidden Pivot in June. Looking ahead, if MSFT is going to sync up with the thousand-point rally I've forecast for the S&Ps, it would imply the current correction has significantly further to go, possibly to the 469.29 midpoint, or even to the green line (x=407.04). A 'mechanical' buy at either would be an opportunity we should not pass up, so be ready.
No change in last week's outlook. The stock has tripped a conventional sell signal that portends more downside over the next 6-8 days to at least p=493.67. That's the midpoint Hidden Pivot support of a large, bearish rABC pattern projecting to as low as d=431.89. Regardless, p looks like it will be an opportune spot to attempt tightly stopped bottom-fishing. As always, a decisive breach of the midpoint would shorten the odds of more slippage to the D/d target.
Greed got the better last week of the sleazeballs who manipulate this stock for a living. They gapped MSFT 40 points on Thursday's earning's beat, but the move was too ambitious to sustain, and MSFT came down hard. As a result, there was little opportunity to distribute stock at or near the top. It will also have left buyers with a bad taste, and they will pose a serious obstacle when DaBoyz attempt to re-levitate the software maker's shares for distribution. The selloff looks likely to hit 493.67 before MSFT can turn around, so you should plan on doing some tightly stopped bottom-fishing there (weekly, a= 468.35 on 7/5). If that midpoint Hidden Pivot support fails, more slippage to as low as 431.89 would become likely.
MSFT's monthly chart is companionable with the picture I've provided of the September E-Mini S&Ps (see above). The move through p=469.29, the midpoint Hidden Pivot, occurred with such swift force that there can be little doubt the stock will achieve D=593.75, exactly 80 points above. A swoon first to x=407.04, the green line, seems unlikely, but it would trigger a very enticing 'mechanical' buy that you shouldn't pass up. A shortable stall at p2=531.54, (the secondary Hidden Pivot) is probably a better bet, so be ready with a tightly stopped offer if the stock gets there this week. The one-off 'A' low I've chosen is well formed and could give us an edge if most other traders use the 'marquee low' at 213.43 to peg a top. it would be nearly six points above ours, at 599.s1.
Microsoft's deftly engineered short squeeze minutes before the opening bell on Friday slightly exceeded the 516.95 target we'd been using to stay confidently on the right side of a heavily overextended trend. The top was fleeting, volumeless and not just a little sleazy, creating a possible top that could endure for a while. Let's use the green line (x=483.95) as a minimum downside target for now. If it is touched, that would imply more downside to at least p=453.26 (the red line, a midpoint Hidden Pivot support).
When MSFT overshot a longstanding Hidden Pivot target at 503.69, it signaled more upside to at least 516.95. That is why I advised buying the stock 'mechanically' if it pulled back to 495.76 (the green line). Alas, it corrected no lower than 497.80 last week, stranding our bid. The trade remains viable, however, and you can keep bidding there, stop 448.60, until such time as the stock pushes above 509.89. (Alternatively, you should use a 'camo' trigger to initiate the trade if you know how, since it could cut the initial risk by as much as 95%.) The 516.95 target is still valid, as implied above and you can short there with a stop-loss as tight as 0.70, provided you've profited on the way up.
The grandaddy of all short squeezes (in dollar terms) stopped an inch shy of the 503.69 target we've been using. It looks like 'our' target got front-run on the intraday charts, but the view shown, of the daily chart, 'feels' like the target will be achieved. In any case, we should be ready to get short there, especially subscribers who have made money on the way up using my crazy-bullish targets. This should be done with a tight stop-loss, preferably tied to a small-pattern ('camouflage') trigger, since we've become used to seeing this stock vaporize Hidden Pivots made from inch-thick titanium. I consider this unlikely, but the pattern itself is probably too obvious to give us our top precisely where we want it. ______ UPDATE (Jul 4, 12:55 p.m. EDT): Some subscribers were able to get long just ahead of the stock's engineered, lunatic leap this morning using a Hidden Pivot correction target I'd disseminated earlier. Visit the chat room for details. ______ UPDATE (Jul 4): Technical signs remain persuasive that the stock will make a potentially important top at or near 503.69, a Hidden Pivot resistance nine months in the making. This warrants laying out shorts at or near the target -- either via purchasing puts when MSFT gets there; or, preferably, naked-shorting soon-to-expire, at-the-money calls with a tight stop-loss. ________ UPDATE July 9, 6:41 p.m. EDT): The Great Microsoft Waft drilled a .50 caliber hole in my Hidden Pivot target before pulling back unconvincingly. The stock is on its way to at least 516.95 over the near-term. It should be bought 'mechanically' on a retracement to x=495.76, stop 488.69, (60m, A=472.51 on 6/23).
