MSFT is a Compelling Value..
And IMO, all the negatives are more than priced into the stock, margin players were wiped out last Monday, so I see smart money loading up now, their earnings was foretold and expected in advance..
As for your "crash", we already had it..
According to my version of the Elliott Waves, (over-simplified, for example purposes), we can go 1 of 2 directions next week.. We can take the Wave 5 plunge down, making this last rise a Wave 4 correction in a new Bear Mkt.. Or, we can re-label Wave 4 as a Wave 1 of 5 rise in the existing Bull Mkt..
The key to understanding which wave is which, is to analyze the behavior of the waves.. When there are 5 down waves, it's a Bear Mkt, where 5 down are followed by 3 up, hence downward trend.. When there are 5 waves up and 3 down, it's a Bull Mkt, hence the uptrend.. The key again, is did we make a Wave 3 dip and take a Wave 1 rise in a 5-Wave rise in a Bull Mkt or is the next wave a Wave 5 decline from a Wave 4 correction in the Bear Mkt? This is crucial to deciding which way we go from this turning point.. Last August, the wave 4 correction turned out to be a new wave 1 Bull Mkt..
Now, there are 2 styles of waves (no matter what # you assign them), that give you clues as to the nature of the market in which they are performing their function.. An 'impulse wave' is a strong, decisive one, which travels in line with it's market, whereas a 'corrective wave' is a meandering animal, unsure of it's mission.. The fierce jump off of last Monday's Naz 3210 was a bounce off the trendline from the Oct98 and Aug99 and Oct99 lows, in essence making a triple bottom off the trendline.. My analysis is that this was the beginning of a very decisive upwave 1 in a very strong, ongoing Bull Mkt, and the worst that will happen now is a retest of that trendline (somewhere around 3250)..
Below is the Naz chart.. Draw the lower TL support matching the troughs at Oct98, Aug99, Oct99 and Apr17, 2000.. After that, draw the upper TL resistance matching the peaks touching May-Jun98 and Mar00..
siliconinvestor.com
Now that you have the chart above printed out and the support and resistance trendlines drawn, you can see 2 things.. First, the recent "crash" was nothing more than a correction of the prior excesses; Second, the Naz will continue it's uptrend, possibly hitting Naz 6000 by year end..
Now, should the Naz drop below last Monday's 3210 low, all bets are off..
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