April 9 Will Be An Inflection Point For The Stock Market
Stocks are awaiting critical economic data this morning, and April 9 could prove to be a significant inflection for the stock market.

April 9 Will Be An Inflection Point For The Stock Market

April 9, 2020

Stocks – BYND, SHOP, ROKU, ZM

Macro – SPY, VIX, HYG

Thankfully, the week is over after today. It will be a busy one today, with a lot of economic data, and Jay Powell is speaking at 10 AM. It seems like the recent trend has been for the markets to rally following the initial jobless claims, which is baffling. Perhaps it is because the numbers are turning out better than the whisper number, or simply because the market is trading separately from the economic data at this point. 

Many readers like to send me little “love” notes explaining to me that the market is looking 6 to 9 months forward, and after 25-years in the business, I can assure you nobody knows that better than me. The questions you should be asking yourself is this; where will earnings be in 2021? Assuming a one-year forward PE ratio 17, the S&P 500 is assuming $161.71. In 2019 we had earnings of $157 in 2019. So if you think 2021 is likely to resemble 2019, then yeah sure, the market is fairly valued at current levels. Unfortunately, my data and research suggest that earnings in 2021 will be less than that of 2019. That’s how I look at it. Agree or disagree, that’s what makes a market. 

S&P 500 (SPY)

The S&P 500 is attempting to break the downtrend, but for now, it is struggling, and the SPY is currently fighting at the downtrend. At this point, the SPY has hit $277 and is backing off. How the S&P 500 finishes and where it finishes today will tell us a lot about the next move, today could very well be an inflection point. 

spy, S&P 500

VIX

The VIX has fallen but it is still elevated and it would suggest there is still plenty of uncertainty and fear left in the market place.

S&P 500 , spy

High Yield (HYG)

The High Yield HYG is also at a critical inflection point today as well. 

high yield, hyg

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Shopify (SHOP)

There is a clear downtrend in Shopify. However, the stock has to first rise to roughly $440. 

shopfiy

ROKU (ROKU)

There is also a clear downtrend in Roku, but with this one falling to $81.

roku

Zoom (ZM)

Zoom has fallen pretty close that $105 level, but I think it still has further to fall and a break of $105 drops to around $90. 

zoom, zm

Beyond Meat (BYND)

Beyond Meat has bounced nicely, but watch for resistance at $78. 

beyond meat bynd

Good Luck!

-Mike

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