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

Friday | August 7, 2020

Hello Eizell.




Three days in a row above 3300. Seventh day in a row for the NASDAQ higher. A tad overdone?

The SPX opened lower and fluctuated around the unchanged line in fear that the 435 elected children in Congress could not come to an agreement on a $1 to $3 trillion covid bill. I'm willing to bet that 95% of them don't know that there are 12 zeros in a trillion.

They are playing politics with money larger than the capitalization of Amazon and Apple combined. This is the same amount off ALL tax revenue that came into the treasury in 2019, and there was still a deficit. At 1pm Chicago time, the market started to climb on rumors and hope that a deal would be made by the end of the day today.

The one thing that did surprise me was AAPL was higher by $15.36 to close at 455.61 (3.5%). It is higher by $100 in 2 weeks.

At the end of the day, the Dow was up 185.46 (0.68%). The SPX was higher by 21.39 (0.64%). The NDX closed up 141.64 POINTS (+1.27%).


TODAY: August 7

TODAY Lower at open. End of day is dependent on Congress.

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

Happy Purple Heart Day. George Washington created the purple heart today.

The market might need a purple heart by the end of the day if Congress doesn't pass an anticipated covid relief package. COMMON SENSE: Congress almost NEVER passes anything within 5 minutes of a deadline. Today's vote deadline is well after the market open, so in concern that it might not pass trader's will likely trim some of their holdings (sell shares).

The fact that the market is only 2% off all time highs, is up 3.65% on the year, and has been up 7 days in a row would be good odds we will see a lower open. After that...? Who knows.

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
(3.64% so far)

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We put on examples of 1-day put condors on the close. We also sold some long deltas. If we open considerably lower, we will reverse the above. How fun!



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