MSFT | Super Cycle Correction Complete or Just Getting Started?Microsoft CorporationBATS:MSFTbalighmehrezThe Big Picture — Super Cycle Context Microsoft completed a textbook 5-wave super cycle impulse from the 2009 low at $14.87 to the July 2024 high at $555.45. The internal structure validates well: Wave (1): $14.87 → $50.05 Wave (2): $50.05 → $39.72 (shallow 29% retracement — alternation sets up deeper wave 4) Wave (3): $39.72 → $349.67 (extended wave — ~1.618x wave 1 on log scale) Wave (4): $349.67 → $213.43 (44% retracement of wave 3 — alternation with shallow wave 2 confirmed) Wave (5): $213.43 → $555.45 With the super cycle complete, the question is no longer if a correction has begun — it has. The question is: how deep will it go? What Has Happened Since the Top From the $555.45 high, I count an (A)(B)(C) flat correction into mid-2024 (the choppy range visible between the two peaks). This was followed by a second (5) push to $553.72 — forming a near-perfect double top. What followed was a sharp decline that I'm labeling as a higher-degree correction off the super cycle top: (A) down to $492.37 (B) rally to the ~$560 zone (November 2025 high) (C) impulsive decline currently unfolding, with price having already tagged $381.71 This brings us to the critical juncture we are at today, with MSFT trading around $401. 🟢 The Bullish Case — Correction Complete at $381.71 Under this scenario, the ABC correction from the super cycle top has already completed: (C) = $381.71, representing a 32% retracement of the entire super cycle ($14.87 → $555.45). This sits neatly between the 23.6% level ($427) and the 38.2% level ($349), and it falls right into the zone where super cycle corrections of extended third waves commonly terminate. Supporting evidence: RSI Bullish Divergence (Daily): Price made lower lows from $410 → $381.71 in February, but the RSI printed higher lows — a classic signal that selling momentum is exhausting. Volume tapering: The most recent leg down has seen declining volume compared to the January selloff, suggesting distribution is drying up. Fibonacci confluence: The $381 level sits near the 61.8% retracement of wave (5) of the super cycle ($213.43 → $555.45), giving it additional structural significance. Wave (4) territory support: The prior wave (4) of the super cycle topped at $349.67 — corrections commonly find support within wave 4 of one lesser degree. Price at $381 is hovering just above this zone. Bullish targets if confirmed: The start of a new cycle would initially target the $460–$490 zone, with long-term targets well above the $555 super cycle high as the new cycle matures. 🔴 The Bearish Case — This Is Only Wave A of a Larger Correction Under this scenario, the decline to $381.71 is only the first leg (wave A) of a larger corrective structure. Super cycle corrections are typically deep and time-consuming — a 32% pullback after a 17-year bull run may simply not be enough. Supporting evidence: Proportionality: Super cycle wave (4) corrected 44% of wave (3) and took roughly 2 years. A super cycle correction of the entire five-wave advance should arguably be deeper and longer than a single sub-wave correction. The 38.2% retracement at ~$349 has not been tested. This level also coincides almost exactly with the wave (3) peak at $349.67 — a natural magnet. Historical precedent: Microsoft's last major bear cycle (2000–2009) retraced significantly more than 32%. While the macro environment is different, the principle of proportional corrections still applies. The current bounce structure: If the rally off $381.71 unfolds in 3 waves (A-B-C) rather than an impulsive 5 waves, it would confirm this is a corrective bounce (wave B) rather than the start of a new bull cycle. Bearish targets if confirmed: A deeper wave C could target the 38.2% retracement at $349 (confluent with the wave 3 peak), or in a worst-case extended C wave, the 50% retracement near $285. ⚖️ Confirmation & Invalidation — How to Tell Which Scenario Wins 🟢 Bullish Confirmation: Price off $381 unfolds as an impulsive 5-wave rally (clear 1-2-3-4-5 up), not a corrective 3-wave bounce Daily close above $492 — breaks above wave A and enters wave B territory, signaling trend reversal $381.71 holds on any retest as a higher low RSI divergence resolves bullishly — RSI breaks above 65 and holds, exiting the bearish regime Volume increases on rallies and decreases on pullbacks, confirming accumulation 🔴 Bearish Confirmation: Rally off $381 unfolds as a corrective 3-wave structure (A-B-C up), not an impulse Price gets rejected and reverses from the $460–$490 resistance zone Daily close below $381.71 opens the door to the 38.2% retracement at $349 RSI fails to break above 65 on the bounce, staying trapped in bearish regime below 50 Volume spikes on a break below $381, confirming renewed distribution ❌ Critical Invalidation Levels: Bullish case is killed entirely below $349.67 — this enters wave (3) territory and violates the structural requirement for a completed correction Bearish case is invalidated on an impulsive break above $555.45 — confirms the correction is over and a new cycle has begun 🔍 The Bottom Line MSFT is sitting at a decision point that will define the next major move. The Elliott Wave structure from the super cycle is clean and well-validated — and both scenarios are structurally legitimate at this stage. The RSI bullish divergence and the Fibonacci support at $381 give the bulls a reason to lean in. But the proportionality argument and the untested 38.2% retracement at $349 keep the bears in the conversation. My approach: Watch the internal structure of the current bounce. If it unfolds in 5 waves up — the correction is likely over. If it stalls in 3 waves and rolls over — we're heading lower. The market will tell us. Let price confirm.