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Swing Trade Idea – October 15, 2020

Market View

In the premarket ahead of the USA jobless reports, world markets are all  in the red with the USA, Europe, Japan, Hong Kong and Asia all down. US dollar is higher and yield curve is flatter with longer rates lower,  both which are negatives for equity.  The trio of catalysts are the meme that USA stimulus will not happen before the election; a rise in Covid cases in Europe and new lockdowns; and issues with some Covid vaccine trials. Bank earnings were not supportive so markets are correcting from Monday’s overbought levels. USA markets are being led by large cap tech to the downside. FAANGM stocks like AAPL are currently in gap areas so one should be prepared both for further drops on the open as well as a reversal off short covering. QQQ, IWM are negative gamma and SPY is close to negative. Negative gamma means that market makers will sell as the market falls, speeding up declines

Premarket names:

NIO ; FSLY reduced revenue forecast; WBA earnings; VRTX drug failure; Downgrades NUE PGR MDLZ WMB OKE ROKU TTD FSLY 

Stock Idea; NFLX

Tech stocks are all weak on the open but NFLX is flat. NFLX has earnings next week and there is a decent chance that NFLX can lead if and only if Qs bounce. Stop can be placed below the overnight low. Note the 200 SMA has been a support level on the hourly chart.