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

Wednesday | October 28, 2020

Hello Eizell.





YESTERDAY: October 27

SPX 3390.68 -10.29

The day was very quiet after opening slightly higher with the SPX opening higher by $8 points. A look at the day's 1-minute charts belies what the day was really like. The graph deceptively looks like chaos personified. In reality, we were in a $20 point range where the highs were +8 and the lows -12. The chart looks like that tight range was akin to a pin ball stuck thumping between bumpers, but it was a very slow move in both direction.

The market gave up on hope for a stimulus package the previous day. The market watched the Rasmussen polls (the most accurate election polling company) move to Trump +1 point versus -13 a week ago, making an election bet difficult to predict. Riots started again after police officers shot an individual with a knife, but the elections stole the headlines from the tiring riot news. Actually, there was some discussion of deals and earnings in the market media, which is a first in a while.


TODAY – Hostage Situation – Probably staircase lower into the elections

The markets are likely to work a little lower over the next 6 days in preparation for the possibility of a Biden win. The reason is that Biden is pontificating his desire to raise taxes. I am not a bright man, but I do KNOW that you do not raise taxes in an economic slowdown unless your goal is a depression. I'm also not used to seeing a politician bragging about wanting to raise taxes.


Elections are not what they were when I was a kid. It is now a much more kinetic activity where tricks and attacks are played out, not a discussion on policies. It is a circus, and it is going from elephants dancing into a freak show.

I can give 100 examples of how this election is a circus. I can even pass very credible blame on much of the media who is manipulating half the news, and burning the other half like books in 1933 Germany. They will just shout terms like “Nazi” without an understanding of the term because schools curriculum are watered down. We have politicians in Illinois who are trying to get rid of History classes. A society of idiots are easy to manipulate, and I guess that is the end game. I went to a private high school where in 4 years, I had 1 elective – mechanical drawing or art (my Junior year). Now, the school's core is 1 class, and the rest are electives.

It doesn't matter. No one is willing to accept truth anymore if it hurts their feelings, and goes against the narrative of what they want to hear. What I do know is that a survey came out yesterday showing more than 2/3 of the country (69%) are “feeling VERY stressed over the elections”. Now add a change in lifestyle from corona, and the loss of many freedoms and activities. People are stressed, and any change may seem inviting – even if for the worse.


The truth is chaos is going to get worse over the next 6 days, and it will affect the market. Yesterday alone, we had Trump's website hacked, riots, Congress not wanting to work on stimulus to help those in need because it may indirectly help Trump, complaining about the Supreme Court, Project Veritas catching politically motivated people illegally going to nursing homes to get confused residents to change their vote to a different candidate, Hunter Biden's business partner on FOX claiming illegal activities, rants about packing the Supreme Court, etc.

I predicted last week that states would shut down to influence the election. Today, Illinois decided it must shut down to stop the c-virus. I guess I was wrong?

I will be even more wrong, but right, these next 6 days. Lots of chaos, not to influence an election, just coincidentally starting now and then ending after the election.

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
(+4.95% so far)

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Class tonight is going to be huge. It will be a recap of three strategies that will come into play the last week before the elections – including night minis, VIPAR spreads, etc.



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