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Prepared by and Scott
Writing under the nom de plume of J.L. LORD

Thursday | June 25, 2020

Hello Eizell.




The day blew up the run higher we were having trying to get the SPX positive for the year. A 2.6% drop in the SPX and 2.72% drop in the Dow was a result a new coronavirus news.

Apple announced they were closing a few stores. This helped upset the markets; however, AAPL closed down a modest 6.47 at 360.06 (-1.77%) compared to the SPX -2.59%. Travel stocks were especially hit with UAL lower by 8.34%, AAL lower by 6.86%, BA declining 5.96%, and CCL down 11.11%.

For the last few months, the market has shown how resilient it is to the coronavirus while climbing back to unchanged from the -36% levels. Yesterday showed that it is also still vulnerable to headlines. The main one that shook markets was several states reporting record jumps in new covid-19 cases. The governor of Texas warned about a massive outbreak as they exhibited a record jumps in new cases.

How much of this is simply the result of the US having testing kits available that are made in the US? At the early states of the outbreak, there was a shortage of kits and people were only tested if in ICU. The kits were no more reliable than a coin flip as they were made in China with huge false positive and false negative results.


TODAY: June 25

TODAY – Likely testing 3021, the 200 day MA.

LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off

Probably testing 3150 in SPX again, and this time closing above it, but no strong convictions here. I was not overly impressed by yesterday's run higher, and AAPL is getting a little overdone.

I am still standing by my prediction (made December 31, 2019) that we will be positive for the year and making new all-time highs by the end of the year. I maintained this stance even when the SPX was down -35% for the year.

S&P 500 Price Limits

From 8:30 a.m. to 2:25 p.m. CST, there are successive price limits corresponding to 7%, 13%, and 20% declines below the previous trading day’s reference price.

From 2:25 p.m. until the 3:00 p.m. CST close of the cash equity market, only the 20% price limit will be applicable.

Average year with lots of intermittent volatility
(-5.59% so far)

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