SG-Futures Weekly Markets Review 16th November 2020

Evening all,

Really interesting week across E-Mini S&P in particular last week, with lots to ponder over as we come into this week. With news of the Pfizer ($PFE) Covid-19 vaccine last Monday, Globex futures shot higher in the market, printing highs just shy of 3,650. When the cash market opened, we briefly explored higher, before heading lower (very high probability move given the size of the gap). We dribbled lower over the course of the day.

As we explain in our video this week, Tuesday-Friday was spent digesting the news, and whilst the news is a positive milestone in the fight against Covid-19, the end game isn’t exactly visible just yet. With Joe Biden likely to announce fresh lockdown measures in the first of his presidential actions, we’re in no means out of the woods just yet. A fresh lockdown will result in retail, travel & transport stocks suffering, like they did back in March & April, and the rally in said stocks in the latter half of last week may be slightly pre-mature. The same can be said for some of the work-from-home stocks which sold off hard for most of last week.

For us, this presents some potential short-term positions we can take, given the news is good, but not that good. Vaccines take time to roll out and it remains to be seen how soon, in reality, we can ‘get back to normal’.

The Nasdaq was the big laggard this week given the weighting and prominence of stocks that look to benefit from lockdown measures and some big names took the index lower over the course of the week. This is likely where the opportunity lies this week and next.

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