Tech Rally Catches Up with Q3 Earnings Season
November 6, 2020
Trading patterns and option term premia suggest the big volatility buyer in Tech is back. You can also see this in post-earnings stock price behavior the last two days. The last time ‘they’ stepped aside was September 3 with the RTY (small cap) and NDX (tech) underperforming the SPX and SVX (value) during the ensuing ~6 weeks. Expect these cycles to contract into ~2-3 week windows with the SVX returning to form (outperforming) on decent vaccine data. Financials are still our favorite value sector with Materials second.