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

Friday | March 6, 2020

Hello Friend.





The SPX opened down 70 points. Why? In all honesty, I have no idea. There were more reports about infections of the coronavirus, and the death toll in America is at 11 now.

It is a very sad thing for the families of those who perished, but keeping things in perspective, we have more gang shootings in Chicago in a weekend.

Every day, well over 300,000 people drive drunk, and over 10,000 die from drunk driving fatalities. Up to 60,000 people a year in America die from the flu.


After the open, the market bounced a little on rumors that Elizabeth Warren was dropping out of the presidential race, leaving the field down to Joe Biden and Bernie Sanders. People speculated that she would throw her support towards Biden, but she remained uncommitted.

One can probably speculate accurately that she will offer her support to whichever candidate promises her the most.

With Warren not throwing her support behind Biden, and the media trickling out endless updates on the coronavirus, the market got heavy. The media was also careful to keep pointing out the economic effects of the panic they create with the reduction of travel and lodging.

Eventually the market has to succumb to a deluge, but bad news and the SPX slugged to give back almost all of yesterday's gains.


Right before the close, the SPX tested support at 3,000 before bouncing to close at 3023.94.


SPX closed down 3.39%.

Dow closed down 3.58%.

AAPL closed down 9.82 at 292.92 (-3.24%).

Dow Transports entered BEAR MARKET (down 20% or more) territory.


TODAY: March 6

LOWER (hopefully):

Immediately after the close, the market started to pull back slightly. As the night wore on, the SPX was down -25 points at midnight (Chicago). Because of the way the futures closed 15 minutes after cash, a -25 in the futures means the SPX cash would be down about -35 if it were open.

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
(-3.12% so far)

POT Logo

A VERY VERY GOOD CLASS. We discussed high volatility trading. We talked about what happens to option premium, vertical spreads, the standard deviation bands, etc. as the market goes from a low to high volatility situation. We further discussed how skew and high volatility are favorable for some strategies such as the butterfly and condors – especially when compared to a vertical spread. We also discussed Example #51 (the 5 parts) and the reasoning behind adjustments and lopsided contract sizes

Overall it was very informative.



Up and Running for POT students (so far).

Really quickly...

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P.O.T. Schedule to come.


Trading is a tough job on a stomach void of coffee and humor.
You provide the coffee and we will take care of the rest.



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