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

Tuesday | October 13, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

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DAYS UNTIL ELECTION = 21

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YESTERDAY: October 12

SPX 3534.22 +57.09

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The market opened higher once again. As has been usual for the last 5 days, the market is running higher on expectations of another stimulus package and a Trump win. Wall Street wants and needs a Trump win because Biden's plan to add $ TRILLION in taxes to investors, a trading tax, more regulation, etc. will play absolute havoc on the industry. Many people do not like Trump however, there are no surprises with him.

The market blasted off from a net change of +22.48 points and ran highs into the last hour of trading, reaching a high of 3549.84 (+72.72) on the day. Interestingly the market with an opening print of resistance near 3500 and hit is a high of almost 3550 – more resistance.

I actually wrote yesterday in the Morning Coffee Report that we would run higher and test 3500. I was wrong. The market didn't even see 3500 it shot up so fast. One thing that helped lead the market higher was AAPL closed up 7.43 (+6.35%). This stock has not seen this kind of strength in a while.

We did sell off $15 points from the highs on the close. This was interesting as the market has being ignoring bad news all day. Perhaps when traders saw we were up 72 points and only 38 points (about 1%) from all-time highs, they felt comfortable selling some longs.

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TODAY: October 13

TODAY – Test 3500?

The market is getting too strange to predict. Yesterday news came out that the stimulus talks “were faltering”, and the market jumped higher. There was negative news sprinkled in throughout the day about the economy and elections, but the markets didn't care.

Typically, I would say we can pull back and test 3500 since we didn't do that yet, and we can test the highs of 3549.85 in SPX cash. Today? Maybe a little lower now that people realize the market is higher by 9.4% on the year going into unknowns such as a stimulus package, Article 25 hearing, and possible contested elections (and all the fun that goes with that).

EARNINGS SEASON STARTS TODAY with: CITI, JNJ, JPM and DAL.

NEXT BIG DAYS:

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.

2020 ONE-YEAR PREDICTION:
Average year with lots of intermittent volatility
(+9.39% so far)

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