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

Monday | July 20, 2020

Hello Eizell.





Friday saw the markets open slightly higher, but all the gains in the MINIS and SPX were simply making back the losses in the last 15 minutes of Thursday's trading. It was the last 15 minutes after cash closed that the futures fell another $10 points. This was made up for on the opening of trading Friday morning, but immediately stalled out.


After the market opened higher, the SPX and stocks began to sell off. Some of this was from economic numbers and some was from negative news on the Moderna virus antibodies results. The selling ended with the SPX hitting a low of 3205 before climbing again. The good news is we didn't get closer that 3205.65 (low for the day) to test the previous day's low. That is usually a good sign.


The rest of the day saw the market climb to test the other side of the range – the SPX 3233 resistance level we keep falling from. Near the end of the day (last 30 minutes), the market got to 3233.25 before being sold down -$10 points to close at 3224.73.

Keep in mind how big 3233 is in the SPX. It is the unchanged line for the year, and a number we keep selling from. We are currently 0.14% lower for the year in the SPX.


TODAY: July 20

TODAY – Test 3200 on open and run higher.

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

The market is lower in overnight trading, most likely the result of the mayor of LA saying they are on the verge of a shutdown again. Mayor Eric Garcetti blamed the White House for it, and took no personal responsibility. The White House and Dr. Faucci's advice was ignored.

Like all covid news, it hits the market and then is ignored. I suspect that will be the same today. We have a date of going through the ceiling, and it will not be denied. One big company is reporting earnings today: Haliburton.

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
(-0.14% so far)

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This week's class will be a TRADING HOURS class that starts 30-minutes BEFORE the market open. A vote by students wanted to change it to “MORNING FADE” and entering orders to be executed prior to the market hitting the price. It is going to be fun.



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