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

Friday | June 12, 2020

Hello Friend.





The day was a disaster for the bulls. The night session prior to the open saw E-minis falling by -40 points after Federal Reserve Chair Powell answered questions after the rate decision released on Wednesday.

As the open approached, futures continued to fall as reports of spikes in coronavirus victims in cities that reopened started to come in. The projected US death toll was adjusted to above 200,000, and this sent the Minis down -80. This lead to the Dow Jones futures indicated a projected open of 1,000 points lower.

Trading Day

The market opened as expected with most stocks down slightly. The travel stocks (Boeing, Carnival Cruise, Airlines, etc.) were hit harder than the rest of the stocks as traders anticipated a second “lock-down” coming DESPITE VP Pense saying there would not be a second lock-down.

As the day progressed, people had time to think about the bowels of hell we just emerged successfully from, and started getting nervous for fear it could be a round-trip ticket. Inching closer to the 200-day MA just above SPX 3,000, the market seemed destined to test both numbers – and it did.

The night before I anticipated selling based on the previous day's close where the Fed gave the insatiable junkie traders more stuff to get high on, and yet the market closed lower on the day. This never bodes well.


The previous day, I indicated we would be lower by saying we would be getting the “ole flaming bag of dog poop” trick handed to us. I didn't realize the crap was so plentiful, and from more than one dog. The SPX hit a low of 2999.94 while the Dow tested 25,000. The NASDAQ which hit a high of 10.155 the previous day sold off 506 points to close at 9588.

Earlier in the week, the SPX was in positive territory for the year, and now we are down over 7%. Well.....


TODAY: June 12

TODAY – I have no real opinion other than to go against what the market is saying now, wich means we could test 3000 (or lower) again.

LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off

The Eminis are currently higher by about 1.2%, which would have the “analysts” speculating that tomorrow will be a move higher. I am not so sure. Despite the huge edge in predicting a higher day tomorrow, I am concerned that this bounce is minuscule considering the fall we had yesterday.

In other words, I would expect to see 2-3 times the bounce that we are witnessing to feel confident yesterday's selling below the 200-day MA was overdone, and not real. It is almost too easy to bounce from her as a bottom.

In a nutshell, despite the odds being against me, I am concerned we see more selling today – especially if all the amateurs with their Robin Hood accounts can finally sell when the platform is running again.

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 -35% for the year.

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
(-7.08% so far)

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