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Swing Trade Idea – November 4, 2020

Market View

In the premarket global markets are generally up with USA, Europe, Asia green and some weakness in Japan. US dollar was strong most of the night but has turned down in the premarket. Yield curve has flattened with long term yields rising, which is negative for financials but tends to be good for tech.  The Nasdaq is up biggly led by FAANGMT.  The current market set-up would be for a trend day up; however the S&P500 and Nasdaq are above the expected moves which can provide resistance. My interpretation is the market is reacting to the US Senate remaining republican which will put a lid on spending and major changes. Reaction is lower long term yields and higher tech, which is a long duration asset. The Covid stocks are currently outperforming, reflecting a potential Biden win, as its perceived he will want to shut down the economy to the detriment of the small caps. Healthcare up with republican senate

Premarket names:

NIO LI WKHS TSLA XPEV EVs; UBER LYFT Cali proposition went their way; Semis QCOM AMD upgrade MU TSM NVDA; FAANGMT AMZN GS upgrade; IPO stocks ZM CHWY CRWD DDOG FVRR PTON Sportsbetting DKNG PENN BYD China Names PDD BIDU JD  Healthcare UNH AZN NVS 

Stock Idea; ZM

Thesis is that ZM has technically pulled back to the 50sma and made a 61.8 Fib retracement. A Biden win will lead to more shutdowns which is good for the lockdown trade.  Tech can outperform if stimulus is reduced.  Risk is valuation and if market rotates back to the reflation trade.