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Swing Trade Idea – May 19, 2020

Market View

World markets are digesting Monday’s gains with China and Asia strong, Europe weak and USA mixed. Markets were weaker earlier in the morning but have lifted possibly after WMT earnings release.  Bonds now flat, USD down and oil up sets a positive backdrop with the main news item  USA Fed chair and Treasury speaking. Market will like references to the ability to print money ad infinitum.  One should watch whether the cyclicals/value stocks continue to get a bid or there is reversion back to growth/quarantine stocks. Premarket is fuzzy,  quarantine stocks are bouncing as are some transports. SPY 293 is an important level to hold to continue the uptrend. SPY 298 is the overnight high and brings 300 into play and the 200 SMA

Premarket names:

WMT beat may fade;  BIDU beat watch JD BABA PDD etc; HD miss may get bought; MRNA secondary may get bought; Cannabis ACB TLRY CGC active again

Stock Idea: KWEB Long

KWEB is an ETF that holds a collection of Chinese internet ETFs including JD BABA BIDU TCEHY. JD, a previous pick has been very strong post earnings. BIDU reported and is up 7% premarket. China is recovering and these stocks are fundamentally less expensive than USA. BABA is reporting this week and may see a run into earnings. Usual pattern is morning pullback and recovery. Alternative is to look for pullback and bounce in BIDU