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Swing Trade Idea – September 21, 2020

Market View

In the premarket the global indices are  very weak with all markets down. The catalysts are: possibility of new UK lockdown, possibility of suspicious transactions with international banks and death of Ginsburg adding to meme of turmoil if US election was contested.  The week following options expiration is normally volatile and negative so the market action is not unexpected independent of the news.  The banks are doing the most damage to european and USA markets with HSBC, CS, JPM, BK, BAC being hit hard along with the small cap index which is financial heavy. The UK lockdown is raising Covid concerns and impacting travel related names and causing general market weakness.  The USD is higher and yield curve flatter which are negative for markets and reflect the risk-off sentiment. The meme surrounding the death of Ginsburg is that it will distract the US legislature from passing an aid package and adds to the meme of a prolonged post election dispute.  Nasdaq100 is outperforming to the downside but FAANGM stocks charts are poised for larger breaks. As usual use FAANGM as the compass. The large gap down with correlated breadth down can lead to a large trend down today so be prepared for a move down by SPY to 323-320 as well as a bounce but be prepared for bounces to be sold.

Premarket names:

TSLA run into Battery Day; ORCL WMT TikTok might move forward  BRK GS JPM BAC HSBC banks are getting killed. The suspicious transaction news is not shocking but the low rates and weak economy have weighed on banks. BRK might be a bounce candidate as it’s not a bank but being dragged down.  NKLA CEO resigned

Stock Idea; TSLA

Repeat from Friday. TSLA is strong with a very weak tape as investors are buying in advance of Battery day Tues. Dips after the open may be long opportunities, especially if Nasi can bounce.