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

Tuesday | March 17, 2020

Hello Friend.





The Fed took action on Sunday by lowering rates 50 bps like they did the previous week. And like the previous week, the market didn't like it. The Fed added liquidity and cut rates which sent the night session MINIS down limit of 128 points.

Last night in the MORNING COFFEE REPORT, I quoted Nietzsche. Yesterday's trading was proof of his words. This is a sociology dissertation we are living through. Lol.

“In individuals, insanity is rare;but in
groups, parties, nations and epochs, i
t is the rule.”
—Friedrich Nietzsche


On the open the market opened and hit circuit breaker limits of 7% within 0.01 second. This shut down the market for 15 minutes, which gave me time to get a cup of coffee and listen to mayors and governors talk about shutting down cities.

After the circuit breakers ended we fell to close to the second -13% breaker before bouncing. This appears it was forced liquidation and panic on the open. The SPX bounced from 2400 to 2560 before turning over and falling again.

The rest of the day we got a constant trickle of cities announcing they were shutting things down, and the market kept sliding lower again.

What amazed me is that San Francisco announced that they were imposing a curfew. The mayor must has something against this particular virus, because she (London Breed) doesn't seem too worried about cholera or giardia by legally allowing homeless to defecate on the street. Plastic straws are illegal because everyone knows how dangerous straws are, but AIDS infected needles are allowed to be discarded on kid's playgrounds.

Even the Medieval disease of typhus is making a comeback for one last showing because of the sanitary conditions in San Fransico, one of my favorite cities that I will never go to again – ever. I will miss Yoshi's jazz bar. You know things are messed up when rock groups like Metallica move out of the city.

What was very concerning is hearing Las Vegas is shutting down. Canada is closing its boarders. The only thing we don't hear about anymore is the resistance to the southern wall with Mexico.

At 2:45 central time President Trump held another press conference that likely was the cause of the markets closing on the low. In the past the President has asserted that the virus was not bad, and the media was making it out to be a bigger deal than it was.

Yesterday President Trump's took a much more somber tone. He was no longer blaming democrats and the media, but was sounding the alarm of seriousness himself. The President also was vague but brought up the possibility that this could last until August, and the markets did NOT like this. We have been sold on this being a 4-6 week inconvenience, and now it is a new way of life. The longer the conference went on the more the market fell going into the close.


SPX closed lower 11.98%
Dow closed lower 12.93%
AAPL closed lower by 35.76 at 242.21 (-12.8%)


TODAY: March 16

LEMMINGS AGAIN – this time they are climbing the mountain only to jump off again later.

Yesterday we panicked to the downside. Today we wonder why we panicked, and buy the market up 1000 points. Repeat cycle until people cry. It is almost humorous.


The problem is like every virus the numbers grow geometrically, so next week the news will be even goofier. The media is sensationalizing this. You NEVER hear about the recovery numbers.

For example, there are 182,405 confirmed cases and 79,433 have recovered. There have been 7154 deaths as of 11pm Chicago time. I still maintain the N1H1 was more dangerous, and it was ignored. 500,000 died from that, including 12,700 Americans.

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.

You’re braver than you believe, stronger than you seem and smarter than you think”.
—Christopher Robin, Winnie the Pooh

Average year with lots of intermittent volatility
(-16.09% so far)

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Lots of fun coming today. Separate updates coming.



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