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Swing Trade Idea – January 12, 2023

Color Key: Positive – Neutral – Negative

Market Setup Pre-8:30 AM ET

Global Markets:  USA, Europe, Japan, China, Hong Kong Asia – Mild Positive global set-up

•Commodities:  Gold, Silver, Oil and natgas, Grains, Industrial Metals

•Yields: Yields are lower

•Currencies:  US$ -.13%, Euro -0.03%, Yen +1.31%, GBP -.01%

•News:  USA: CPI 8:30 AM ET, UE claims; Bullard 11:30 AM ET, Barkin 12:40 AM ET China: CPI 1.8% y/y, PPI -0.7% y/y

•Stocks: TSM +3% Lowered forecast and Capex due to lower demand;  DIS +1.8% Pelz is active;  AAL +4.5% displays higher guidance, KBH -2.5% earnings with missed orders that fell 47% in the quarter, cancellation displays 68% of gross order;  LOGI -15% displays a guidance cut which can potentially impact PC mfgs.

•General: Leading: Bitcoin, Airlines, GDX, EFA Lagging: China Internet

•Indices: USA indices went flat overnight and have been rising since 7:30 AM ET. The Macro setup is positive with yields lower. The US$ is lower and energy is higher with a caveat that will change following the CPI print at 8:30 AM ET. The SPY 397 has support of 395, 390, and 385 with a resistance of 400, 405, and 410. The SPY volatility is 2.5x next weeks with what I believe is an expected move +/-5.8. In my analysis, I believe that the QQQ 278 has an expected move +/-5, and IV is 2.5x next week with a resistance of 275 and 280 with support of 275, 270, and 265.  The indices are very stretched and positioned for a large upside and downside however, IMO shows a downside move that could be larger than expected given its positioning.

•Stocks to watch: AMZN, AAL, CLF, TSM, BABA, KBH  Spec Names: ARKK

Pre-8:00 AM ET

Earnings INFY, KBH, TSM

Indices /BTC, JETS, GDX, ARKF, GLD, EFA, SOXX, XLE, LIT, KWEB, EWZ

S&P500 AAL, DIS, NFLX, DAL, HAL, NOW

IWM ADTN, MSTR, CLF, FRO, KBH

WSB COIN, MSTR, CLF, BABA

Movers MELI, ADTN, VOD, AAL, MSTR, COIN, CLF, EURN, INFY, HSBC, TSM, RIO, DIS, NFLX, LOGI, CVAC, ROKU, ALV, KBH, BUD, BILI

My Trade Idea: IWM
My trade idea today is, IWM is a way to trade the post-CPI reaction. I think that an expected move is +/-4.2 with large institutional block trades at 183.05 that I could use for a long/short level. The premarket high of 184, I think can be used for a momentum long with 185 and 190 as my targets. My short side targets are 180, 178, and 175.