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Swing Trade Idea – September 03, 2020

Market View

Ahead of today’s release of USA unemployment claims, global markets are mixed in the premarket with USA markets weak, Europe positive, Japan weak, China weak and Asia mixed.  Yield curve is unchanged which is neutral. Oil is weak and USD stronger, both which are negative for equity markets. European PMI data was generally below expectations and retail sales were negative and below expectations – leading to a lower Euro and hence higher USD. Higher USD is negative for precious metals, commodities and emerging markets.  USA markets are today reflecting the rotation that started yesterday. Momentum/growth high fliers are being sold and the laggards are being sold. FAANGMT are all being sold and companies like BAC JPM are being bought.  Today we need to watch the rotation – as long as tech is sold and non-tech bought, the market should hold support levels. If selling becomes broad, a larger down move could begin. I will be also watching for a reversal in the tech selling intraday for a long opportunity.

Premarket names:

FAANGMT CRM NVDA … all moving down, could turn up today, if not look for potentially larger move down.  JPM BAC LLY COST upgrade CRWD earnings beat, target raise but being sold with tech – bounce?

Stock Idea; BAC

Financials received a bid Wed and today financials are up in the premarket. BAC was upgraded today along with JPM and can potentially continue higher if market rotates from tech to value. BAC upside target is 26.50 and 27.50. Suggest monitoring SPY and QQQ to verify that the rotation is continuing with QQQ weak but SPY holding.