Stocks Drop On April 15, And Yes, I Think It Gets Worse
Michael Kramer | Apr 16, 2020 02:22AM ET
Stocks fell by almost 2.2% on April 15, nearly erasing all of Tuesday's gains. Perhaps this is the start of a new trend; maybe it isn’t. I happen to believe this is the start of a new direction as investors focus begins to shift from the actual coronavirus to the pain it is inflicting on the economy, which is severe and making 2008 seem like child’s play.
The worst part about all of this is that the longer the virus remains, the more significant the economic damage will be. NY will now be instituting a new executive order requiring all residents to wear a mask when in public. The state will also begin conducting antibody testing for frontline workers starting this week, with 2,000 tests per day. Could it be the start of the opening of NY state? Maybe. But let’s hope the number of test rises dramatically because NY state has about 20 million people.
Anyway, speaking of NY, the Empire State Manufacturing Survey, had its worst reading ever, a -78.2 .
But wait! It gets worse because industrial production fell by -5.4% month over month, its most significant drop since 1946! Yes, that means it was worse than 2008’s decline of 4.3%.
Retail sales for March fell by 8.7%.
But that’s ok because we knew this data was going to be bad, right? We shut the economy down, and once we flip the switch back on, everything will be fine. Keep telling yourself that. It doesn’t work like that.
h3 S&P 500 (SPY)/h3Anyway, I am moving on. The S&P 500 fell below the uptrend that had formed, and that may not be a good indicator of what is to come. It means the next level to watch out for on the S&P 500 is 2,735, and potential setting up a gap fill to 2,500.
Get The News You Want
Oil prices just continue to fall, and this comes despite the production cuts. That is not a good sign. There is a real chance oil falls to $17.
Regarding Disney, I noted yesterday that there were some bearish options betting recently. The stock finds itself sitting on support at $103 with a drop below the uptrend taking shares to its next level of support to $92.50. Disney’s stock faces further declines.
Roku (NASDAQ:ROKU) jumped yesterday. I wasn’t impressed by their pre-released earnings. You’d think with people being home more; you would have seen a more significant jump in their streaming hours, apparently not. Oh, I know it is because they instituted that new are you watching feature. Anyway, you can read more about Roku in this article I wrote for Forbes.
The technical pattern in Western Digital (NASDAQ:WDC) looks scary, kind of like a bear flag, $35.30 would be the level to look for.
If ACADIA Pharmaceuticals (NASDAQ:ACAD) can clear $46, it could mean shares get back to $51.80. I say that $51.80 because it appears that a reverse head and shoulder patterns may have formed on the chart.
Johnson & Johnson (NYSE:JNJ) appear to have a rising wedge pattern, watch for a drop below $142.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.