MSFT Microsoft 2-Hour Chart; Channel

Microsoft monthly chart was posted a few days back showing that a multi-month and multi-year top is in the offing with MSFT peaking out anytime between now and the end of the year. Keystone figured there was another pop on tap and Mr Softy, standing in a top coat and tails, pulls a rabbit out of the hat. The bunny is named "Buyback." MSFT rocket launches higher (brown circle) as the wealthy pat each other on the back and tell one another how smart they all are, of course with the help of the Fed's easy money.

Buybacks are the mother's milk of stock prices. Comically, it used to be earnings. There are companies that have repurchased 30% or 40% or more of their stock in recent years which means their earnings are that much higher (kept higher) and their PE's remain lower. As the recession approaches and financial markets fall apart over the coming year or two, analysts will look back and cite the obscene buybacks as one of the major causes of the bubble.

Microsoft has nothing better to do with its money, not buying any start-up companies nor investing the money in equipment or employees, than to buy back stock so the elite class can see their stock portfolios grow larger.

Before the Great Recession a decade ago, when a company did a buyback it would immediately bounce the price, as it does now, but in three months time the stock price would typically be lower. This behavior was erased by the last decade-plus of global central banker money-printing. The buybacks keep coming over and over again and stock prices climb to the sky.

Interestingly, Mr Softy may want his money back because his bang for the buck lasted all of about 3 or 4 hours, two candlesticks, and price retreated back down. Go back and review the prior chart but the thinking is a retreat now, but MSFT will come back up again for another matching or higher high, then that will be THE top likely in that late October to December time frame.

In the very short-term (VST) time frame, it is likely best to wait and see if price comes back up on the chart above. The upper channel trend line spanks price down after the gap-up move on the buyback news, but note the long and strong MACD line that wants another matching or higher high. Price may float back up to check out that gap-high level again and that should place neggie d across all indicators and set up a short.

Long live buybacks! Long live the modern-day money God's that financially engineer wealth for the elite class; the central bankers! Sing Praise! This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.