Occam's Razor Earnings Season

Although the headlines last Thursday evening noted that Microsoft was "surging" after earnings alongside GOOGL, the aftermath has been anything but that for "Mister Softee."

As a reminder, MSFT is the largest publicly-traded firm in America, at nearly $3 trillion. A blowout earnings rally in AAPL NVDA, or further rampage in GOOGL may unseat MSFT. But make no mistake, Mister Softee reigns supreme for the time being. 

Hence, it is noteworthy that Microsoft has not only faded all of its initial earnings gains but is now heading lower, as seen on the updated daily chart, below. The stock has lost $400 as the market sells in front of the FOMC and some more major earnings and other data points over the next week or so. And alongside NFLX and META, MSFT is looking like a vulnerable short among the "Magnificent 7" names. 

The Occam's Razor explanation for this move is that the big money is distributing MSFT after its latest report as it suspects the very best may be behind us.

I see a multi-month topping pattern with plenty of downside (i.e. down to $350) if $400 is not recaptured anytime soon.