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

Monday | February 3, 2020

Hello Mayumi.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: January 31

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OUCH!

The market opened with the SPX slightly lower (-1.33)m, but sell all day and fell fast.

It was a bloodbath with the Dow closing down -603.41 (28,256.03), the SPX closed down -58.14 (3225.52), AAPL closed down -14.36 309.51), the TLT/Bonds up 1.32 (145.18), and the VIX closed up 3.35 (18.84), higher by 21%.

CAUSES:

One: The number of Coronavirus patients increased drastically higher that expected.

Two: There were some reports that the Coronavirus may be a biological warfare project that not only leaked out accidentally, but also may have the HIV virus embedded in it. I have no way of knowing if the HIV is embedded in the virus; however, there seems to be more than circumstantial evidence that the virus was stolen out of Canadian and US labs by Chinese scientists. They can't be content stealing out technology and intellectual property? Who knows what the truth is anymore after being gas-lighted by the media for so long?

Three: Economic numbers were lackluster.

MOST IMPORTANT, and the one I totally forgot about, is that China markets were closed on Friday for the holidays. There were reports that China was going to prevent selling when the markets reopened on Monday, so what does one do to hedge? You sell the US markets as a hedge. So the more the markets fell, the more people felt the need to sell to limit heir losses in the Chinese markets.

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TODAY: February 3

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SUPER BOWL INDICATOR – BEAR MARKET

Back in the 1970's, Leonard Koppett noticed a huge correlation between who won the Super Bowl (AFC of NFC) and the stock market that year. The theory was that if the NFC team (San Fran 49'ers) won, the market would be bullish. If the AFC team (KC Chiefs) won, the stock market would be bearish.

According to this theory, we should have a bearish year as the 49'ers seem unable to shake the Kaepernick curse, and KC won by scoring three times in the 4th quarter. After Koppett found the correlation, it seems to have become less reliable. Though its success rate is 75% (as of 2020), the last 4 years have been wrong.

I don't give this as much credence as when Mars is in Retrograde to Venus, or when I drink a tea and all the leaves stick to the cup facing south. Unless I walk under a ladder, it should be fine.

CHINA FACTOR -BEARISH

With the markets closed, people were expecting to see China's markets crash to catch up with where it would be with the Coronavirus had they been open. China added liquidity, lowered rates, and outlawed short-selling (again), but the markets are still down 9% at the time of this writing. China even somehow got “lucky” (wink, wink) by beating their PMI manufacturing number despite a major chunk of their population on lock-down (quarantine).

COUNT AS OF SUNDAY NIGHT

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OVER DONE - BULLISH

Friday's markets were likely overdone. A good chunk of selling and fear can be attributed to people worried about how bad the markets in China would be on Monday when they reopened. FEAR IS ALWAYS OVERDONE.

I would normally go home long deltas, short volatility, etc. after flush-outs like Friday. If there really is HIV embedded in the Coronavirus, things could still get very bad. If this is proven incorrect, unsubstantiated, or just a fake rumor, and the disease is just a bad cold, we should bounce.

2020 ONE-YEAR PREDICTION:
Average year with lots of intermittent volatility
(-0.16% so far)

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Separate update coming.

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