Markets start the week with some profit taking from the hot markets in China spilling over into a generally weaker Europe disappointed by lack of co-ordinated action on any form of fiscal stimulus ‘rescue package’.

There were shades of 2015 in the Chinese markets this week as margin financing came roaring back in for China’s re-boot of the ‘can’t lose’ mentality recently adopted by the RobinHood day traders in the US – and still frankly running in the US tech space.

The US markets last week sold off into the close as they began to worry about the long awaited (and dreaded) second wave of the virus, coming straight back to the long term support line at around 3000 on the S&P500.

Traders are trying to see if the dollar will break to the downside. On balance it still looks like it might, but no clear trend yet.

As discussed in Friday Market Thinking, we would expect the professional traders to try and bounce the amateurs out of their newly acquired positions with a shift to a glass half empty stance this week.