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Swing Trade Ideas – January 27, 2021

Market View

In the premarket world markets are weak with USA red, Europe red, Japan red, China red, Asia red. US dollar is up which is negative for equities and commodities and a risk-off signal. Yield curve is flatter which is negative for financials and financials in particular. Oil is lower which is a negative for markets. Catalysts for the weakness is being attributed to hedge funds blowing up due to short squeezes; ECB reacting to a higher Euro and correction from overbought levels.  Heavily shorted names are forcing the hedge funds to sell their longs (tech momo) to cover their margin. S&P500 range based on options positioning is 3850-3750 with the potential for a much larger move below 3750. Large cap market is being supported by the FAANGM with MSFT doing the heavy lifting.  One should watch the FAANGM as if they break down there is a possibility of a larger move down. Premarket and ahead of the Fed, S&P500 is bouncing off the Monday dip levels which is a key level to watch today.  Earnings were generally good but most companies aside from MSFT are lower

Premarket names:

MSFT earnings beat; AMD TXN  beat but semis weak today; High short interest AMC GME REV AXDX BBBY TR GSX CLVS LGND SRNE GOGO BB FUBO; WBA new CEO;  COF earnings beat; TWTR ARKK buying; GLW ABT MMM earnings;  Weak sectors Semiconductors, China Internet, EEM, Solars and Alt Energy

Stock Idea; TWTR

TWTR is positive on a weak day. High volume Tues with unusual call buying. ARKK buying TWTR is an additional catalyst for a move up as many follow the trades. With a weak market would look for a dip to enter with target being a gap fill to the 52 level.