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

Thursday | February 13, 2020

Hello Mayumi.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: February 12

The markets opened $12 points higher as measured by the SPX index. The jump was the result of more favorable emotions about the Coronavirus, and to a much lesser extent, chairman Powell not saying anything scary.

As the day went on, AAPL, GE, NFLX and FB kept climbing. AAPL alone closed up 7.59 (2.4%) at 327.20. This helped drag the SPX to new highs – again. The Dow and NASDAQ followed with the Dow closing up 275.08 at 29,551.42. We are literally 448 points from Dow 30,000.

What surprised many market watchers is that Bernie Sanders won the night before, putting him as the current leader for the Democrat nomination. The way the market took Bernie's big win is that he doesn't have a real chance of winning against President Trump so don't worry about him. We don't have to start moving the market lower to price in socialism.

The SPX closed at 3,379.39, which is only 20.61 away from 3,400.

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TODAY: February 13

After Hours Trading

At about 6pm Chicago time, the E-minis were higher by $2 points, and then in moments, they were down -$14. The reason for the quick fall? It was the same reason why the markets were higher Wednesday – Coronavirus. This time the news was horrible.

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For days, people likely have been thinking my tin-foil hat was askew when I claimed China's reporting of actual coronavirus patients was likely bogus, and that the numbers of sick and dying were much worse. I spoke of media personnel in China who wee arrested and fired for reporting numbers against the official government narrative. People who showed up at the ER room were sent back without being diagnosed, thus they didn't make the “official tally”. Many dead were cremated without being tested and given a diagnosis of pneumonia.

China has refused to allow the Center for Disease Control to go to Wuhan to observe and speak to doctors. One has to love communist and socialist government control. Is there really a danger if the government says there isn't? Does a tree in the forest make a sound when falling...

China's robust GDP has fallen to almost 0%, and the coronavirus shutting down companies can take that into negative territory fast – so just say there is no virus and open the damn companies.

This will decimate the Chinese automakers numbers, not to mention supply chains through China. I know many reading this are chocked that China would lie to make a dollar. Sorry, but Santa is not real either.

HOW DID THEY MANIPULATE?

Just ONE of the ways was that if a patient tested positive for the virus but did not show symptoms (yet), they were not counted in tally as having had the virus. Huh? Testing positive means you have the virus, right?

Last night at about 6pm, it was announced that they were going to count people who tested positive, but still were not allowing the CDC to observe and/or help. What does this have to do with the numbers? Look below and you will understand why the market panicked.

INFECTED = 14,840 more to 48,206

DEAD = add 242 more deaths.

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Today

I have said for a week (or more) we are going higher. We are in a buying frenzy and the people showing up to the party late are always the most thirsty. I have maintained that I think we are going higher in the medium term, but will have swings lower once in a while as the media scares people when surprising new coronavirus news comes out.

In the past, we opened lower and then bounced. We might not bounce today as now everyone knows China is not being forthcoming on anything, so why trust them again?

2020 ONE-YEAR PREDICTION:
Average year with lots of intermittent volatility
(+4.60% so far)

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Last night's class: Introduction to layer spreads. This is not only a fun trade that covers a lot of territory, but is a GREAT lesson about position management even if you don't plan on doing the trade.

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LAUGH OF THE DAY

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