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Swing Trade Idea – August 4, 2021

Market View

World markets are mixed with USA red, Europe green, Japan red, Hong Kong green, China red and Asia mixed. Yield curve has flattened sharply in the premarket with long rates falling in the premarket. Negative signal for financials and reflation names. US dollar is down slightly and Yen higher. ADP jobs reported missed which could be the catalyst for the move in yields. Precious metals have moved up sharply in the premarket with the drop in yields. USA markets are soft with Nasdaq flat and Russell 2000 down sharply post the ADP report. Market is leaning to risk-off with FANG stocks the safety trade at the expense of cyclicals. Covid concerns are potentially the catalyst as NYC introduced a mask mandate and China is doing localized shutdowns and companies have highlighted supply chain disruption due to Covid issues in Asia.  Meme stock du jour is HOOD which will have options trading today. Large retail driven moves yesterday and in the premarket.  Yields are driving the sector rotation so watch the 10yr. Higher yields are positive for QQQ and FANG and lower will cause a rotation into cyclicals and small caps.  Expect a range bound trading day as long as SPY 436 holds.

Stocks to Watch

Earnings AMGN ATVI CAR EMR GM HWM KHC LYFT MCHP MTCH OXY PAYC PSA RNG SMG TM TX

Indices SLV KWEB EEM GDX TAN /BTC TLT ICLN XLE JETS XLF IWM XLI ARKQ XLB DIA

S&P500 PAYC ATVI MGM LYV UAA DVA NWS PFE ALB SPG NEM APH LB AKAM GM TT NCLH FTI VLO AAL PNW

Movers CERS HZNP ATVI UTHR UAA MCHP AMD ZY CDLX OSUR AYX AKAM SKLZ AMC

WSB HOOD GEO MVIS SOFI GOEV NIO AMC TLRY DLPN SNDL GE BB

Stock Idea; HOOD

HOOD has become a meme stock with options available today. Potential for a parabolic squeeze today. Premarket high is 55, trading with no overhead resistance. Very risk name to trade. Suggest looking for longs on pullbacks with the highest available option strike as a target.