This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
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APRIL 4, 2020
STOCKS – TTD, FTNT, SPLK, AMD
MACRO – SPY, VIX
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- Unemployment Rate Understated, As Economy Weakens Materially
- Data, Earnings, Techincal Suggest Lower Prices For Stocks
Stocks had a rough day on Friday, April 3, after the unemployment report came in much weaker than expected. When digging through the data, it seems the actual unemployment rate may have been understated at 4.4%. There were many employees that, for one reason or another, were moved from the labor force to unemployed, and removed from the labor force altogether. I review all of this interesting data and the effects it is likely to have on the economy and the market in this video I put together for subscribers.
You can try my Reading The Markets subscription service for the next two weeks for free if you sign up this weekend. So the next two weeks are on me. I also plan to host a live webinar during this period as well. Unemployment Rate Understated, As Economy Weakens Materially
S&P 500 (SPY)
It resulted in the S&P 500 trading down by about 1.5%, which wasn’t bad, but it could have been much worse. During the last 20 minutes of the trading session, some talk of an oil output cut got the S&P 500 to jump by around 1%. The index did manage to fail at the trend line I have drawn into the chart. Monday will be interesting.
The VIX continues to fall, and I as I have been explaining, the decline has more to do with daily moves in the S&P 500 settling, then the notion that fears are reasoning. I explain this week in an audio update, as we continue to see the S&P 500 daily trading ranges fall back to 2-3%, it would make sense to see it decline back to the mid to upper 30’s.
AMD fell on Friday below support at $43 and is now facing a sharp decline potentially to around $38.50.
Splunk has been on the decline in recent days too; it is strange to some degree considering one would think there business shouldn’t be hurt too severely during this period. Regardless derisking is taking place, and this is a high multiple stock. It should hopefully find some support around $94.50.
Fortinet’s chart looks pretty strong here, maybe a cup and handle pattern. Regardless the trend appears to be higher, potentially moving to around $107.50.
The Trade Desk (TTD)
The Trade Desk looks like it may continue to decline, after forming that bear flag. The stock fell below support at $165, and a retest of $139 or worse seems possible here.
Enjoy your Saturday
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.