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Swing Trade Idea – December 06, 2021

Market Setup

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

•Yield curve steeper with long rates rising faster than short – usually good for financials and cyclicals

•US dollar slightly higher relative to Euro

•News: China: PBOC easing as Evergrande approaches default – China stocks higher; Bitcoin crashed 20% Friday night before bouncing; Omicron meme is that it is not more severe than Delta- negative for vaccine makers; Oil: Saudi Arabia increasing prices

Stocks: DWAC raised $1B funding; KSS activist pushing to sell ecom biz;  MSTR, MARA, RIOT, COIN – bitcoin names weak; BKE special dividend; TSLA and NVDA are weak and TSLA is at a dangerous level where much lower prices are possible impacting major indices

•Indices: USA indices are mixed with a small bounce in all but the Nasdaq index. Rotation out of high beta tech into other sectors is continuing, especially stocks held in the ARKK ETF. VIX futures remain inverted, signaling a high risk environment. Volatility implies a 2% SPY move. SPY premarket low 450.7 is the lower caution level where breakdown possible. Be prepared for large moves up or down today.

•Sectors: Leading: Energy Financials Smallcaps Airlines Materials Lagging: Bitcoin Spec_Tech Long Bonds

•Stocks to watch:

BLDR LEN KSS MRO SCHW   MSTR RIOT NVDA TSLA Spec Names: LCID CPE DWAC

Movers

Earnings

Indices XLE XLF IWM JETS XLI XLB DIA XLP EWZ TAN XLV SPY /BTC UNG BLOK ARK SMH SLV TLT IPO

S&P500 MRO OXY SLB APA HES BKR DVN FANG EOG SCHW CVX MS EA WFC HD AXP MRNA NVDA TSLA AD MU ETSY

Movers GCP DWAC KSS SHOO SAVE HIBB EA AAL GS MSTR MARA RIOT UNG GME NVDA RIVN TSLA CHWY DOCU AMZN BIIB HTZ

WSB WOOF CLF RIOT AMC GOEV NVDA RBLX AFRM CCJ AMD PLTR TSLA PLUG NET SOFI NIO 

Trade Idea LEN

Homebuilders are one of the outperforming sectors. Lennar reports earnings in 9 days and may be making a run into earnings. One can use 113 as a trigger (Th high). Note TOL is reporting Tues and will impact other home builders.  Can also look at DHI, TPH or ITB. Caveat require general market to be supported.