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Swing Trade Idea – January 12, 2022

Market Setup – Pre CPI report

•Global markets are positive with USA green, Europe green, Japan green, Hong Kong green, China green, Asia green

•Yield curve slightly steeper – Long yields are a must watch today with CPI data release

•US dollar higher c.f. Euro but lower c.f. CAD

•News: USA: CPI release 830ET Consensus 7%; Powell testimony deemed dovish which lifted stocks and lowered US dollar which boosted commodities China: CPI dropped 3% in Dec and PPI below forecast – meme that China can ease monetary policy which is boosting China stocks and iron ore stocks;

•Stocks: PHG -15% on guidance; BIIB -8% medicare decision; DISH report merger talks with DirecTV; China stocks on fire; JEF earnings miss; ALLY $2B buyback and div raise

•Indices: Global set-up is positive for markets. USA markets subdued ahead of CPI report which can move yields. If CPI > 7% possible outcome is yields higher and tech lower and if CPI << 7% look for yields lower and tech higher and outperformance from beaten down spec tech.  SPX is poised for a potential move to 4750 on a lower CPI and 4650 on a higher. 

•Sectors: Leading: China internet, Lithium Bitcoin Cannabis Financials Energy Lagging: Brazil Gold Healthcare Biotech

Stocks to watch:  PDD BABA NTES BHP ALLY BIIB LLY Spec Names: ARKK SI RKLB INMD

Movers

Earnings INFY JEF

Indices KWEB LIT SOCL MSOS /btc EEM ARKF XLE EWZ GLD XLV IBB

S&P500 DISH RMD FCX TTWO WFC HUM C LVS NOW SBNY AMD NUE T BIIB LLY PYPL DGX FISV GE LH LUV

Movers DNA PL DISH ATAI BABA INFY LC AMBA DASH ICLR WOLF SNOW PHG HYZN BIIB KTOS DWAC PYPL

WSB BABA NIO RIOT CLF PLUG HOOD SOFI DWAC

Trade Idea BABA

China stocks have been stronger than the USA markets in the last few days. Today econ data from China is creating a meme that the CCB may ease financial conditions. BABA is in a bullish flag with resistance at 143 and 153 and 167.  Inexpensive however CCP concerns make this a risky idea.  Can also consider KWEB, NTES, JD