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Thanksgiving travelling has officially started. Coming few days will be the super spreader event of the autumn. The median incubation period for COVID‐19 is four to five days, so if this proves to be a super spreader event we should know by next weekend.
Given the surge in the rotation trade where people are busy chasing laggards (these have recently turned to leaders) as the positive vaccine news and the reopening narrative, Russell has managed exploding to the upside, absolutely and relatively speaking. What if markets start refocusing on the inverse logic should we get a super spreader event, if nothing as a short term narrative?
Seasonality is very strong for NASDAQ, and the Russell vs NASDAQ ratio has turned around violently several times. Sure, the tech momentum from earlier this year is not present, but a quick relative trade could reverse abruptly.
Note how seasonality is much stronger for NASDAQ than rest of the indexes going into year end (second chart).