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

Monday | October 12, 2020

Hello Eizell.





YESTERDAY: October 9

SPX 3477.13 +30.30


In Friday's MORNING COFFEE REPORT, I stated I think the market will go higher, and I stated my reasons.

The markets opened about 12 SPX points higher, and then after the first hour, jumped on (once again) renewed hopes for more corona virus stimulus. News that President Trump had bumped the amount up from $16 T to $1.8 trillion and encouraged Mnuchin to start talks with Nancy Pelosi sent the markets to the highs of the day of SPX +35.

After reaching the highs for the day, the markets gradually subsided from some of its gains when it was noticed that politicians were going home for the weekend. The retreat lower was only $5 points to close with the SPX higher by 3030 on the day. We are quickly approaching 3500 in the SPX.

This week starts earnings season with the banks starting first (boring), and then gradually picking up steam.


TODAY: October 12

TODAY – More higher.

We have been climbing on hopes of a Trump win and an eventually corona virus stimulus package. The drops over the last week were fast, and often deep, but based solely on negative news on one of these events.

Being OBJECTIVE, the markets are afraid of a Biden win. The markets know he wants to raise $2 trillion in new taxes from Wall Street alone. He will not be pinned down on any issues of substance that concern the market or Supreme Court. The unknown scares Wall Street. Many people do not care for President Trump, but he is a known who is very Wall Street friendly.

We are 22 days from the election. We have no idea of the debates are going to occur Thursday after Biden said he wanted Zoom debates. President Trump, fearful that he can be muted by moderators in such a platform, said he would rather do live rallies.

Until something on the corona virus or the elections changes, we will continue wafting higher. We are 110 SPX points from the all-time highs, and higher by almost 8% on the year. Who would have thought?


October 15 – Presidential debate #2
October 22 – Presidential debate #3

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 -36% for the year (this has been here since January 1).

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
(+7.6% so far)

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Get ready. I am shifting into second gear today in preparing for the elections.



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