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Swing Trade Idea – September 04, 2020

Market View

Ahead of today’s release of USA non-farm payrolls,  global markets are mixed in the premarket with  USA markets mixed, Europe green, Japan green and Asia mixed. Yield curve is steeper with long yields higher which is positive for markets and financials. Oil is higher which is positive for equities. USD is slightly higher possibly due to German factory orders were below expectations, weighing on the Euro. The USA markets are mixed with the Nasdaq down 1% but Russell +1% and S&P500 flat. The FAANGMT stocks and momentum tech stocks are again weak premarket while there is positivity in financials, transports and other lagging sectors. This is the same set-up as Thurs premarket and we need to prepared for 1) rotation trade continuing with DJIA rising and Nasi weak 2) DJIA/S&P500 join Nasdaq for move down which could be strong 3) Nasdaq joins DJIA to upside.

Premarket names:

FAANGMT NVDA … all moving down, could turn up today, if not look for potentially larger move down.  JPM BAC AXP GS SPG KO XOM OXY USB GOLD FCAU  premarket strength in financials, travel, energy, DJIA stocks and gold miners

Stock Idea; KO

As the tech stocks weaken, there is some rotation into DJIA stocks by managers who need to remain invested. One name to consider is KO as a long. KO broke the daily 200sma Wed before pulling back Thurs. One could consider a long with the 200sma (50) as a decision level and 60 as a long term target.