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.
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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.
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.
High Yield (HYG)
The High Yield HYG is also at a critical inflection point today as well.
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- The Next Live Webinar Will Be April 16 At 9 PM ET
- I Still Don’t Trust This Market Rally
- Another Interesting Day Lies Ahead
- Finishing Phase 2, Entering Phase 3?
- Stocks Are Testing Big Resistance Levels
- Stocks Set To Rally, But Options Still Betting It Doesn’t Last
- Stocks Reach Critical Levels
- Stocks Are Jumping, Lots Of Bearish Options Betting
- Earnings Decline, Still Have Further To Fall- For The Week Of April 6
There is a clear downtrend in Shopify. However, the stock has to first rise to roughly $440.
There is also a clear downtrend in Roku, but with this one falling to $81.
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.
Beyond Meat (BYND)
Beyond Meat has bounced nicely, but watch for resistance at $78.
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