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

Wednesday | April 1, 2020

Hello Eizell.




What it all comes down to
Is that everything's gonna be fine, fine, fine
'Cause I've got one hand in my pocket
And the other one is giving a high five

—Alanis Morissette



For the last four trading days, the market has calmed down dramatically as I indicated last Monday (see above) that I thought it would. Yesterday was the end of the month and end of the quarter. It was a horrendous quarter with the SPX down 20%, and it had three negative months of trading in a row.


The SPX opened slightly higher and was quiet until the second half of the day when a steady stream of sellers came in. I honestly don't know how to attribute the 410 Dow points lost to the end of the quarter, or President Trump's Coronavirus Task Force briefing.


Coronavirus Task Force Briefing

This was perhaps the most sobering and informative briefing as the team is analyzing more and more data daily.

Today's US numbers came in at 189,035 confirmed with 3900 deaths. This comes to a death rate of 2% of those CONFIRMED to be infected. Much more people are infected but don't show any signs, or attribute it to a cold. Many cases, the doctors do NOT confirm the patient has anything because they are told by their physician to stay at home until they are severe, healing before ever getting bad enough to go to the ER.

President Trump yesterday, along with Dr. Fauci (Director of NIAID), stated that they expect about 100,000 Americans to die from the virus. As sad and shocking of a number as this is, Dr. Fauci stated that if the President didn't piss off every democrat and take the ridicule of Biden calling him a racist, the death rate would be as high as 2 million. That is according to Dr. Fauci and many other virus physicians – not President Trump's numbers.


Bye Bye Joe

There are a LOT of things that are going to cost Biden the election (career politician, voting for Iraq war, voting against killing Bin Laden, his son Hunter, complete loss of memory, threatening to punch every old person who disagrees with him, etc.), but if I was a Biden fan, I would have to change my mind on the virus issue. He played politics and said the opposite of what doctors and the President said, just to win office.

I would not be surprised if the DNC tries to substitute someone else to run at the last second. This is Trump's election to lose.

THERE IS A HUGE DIFFERENCE between 2 million dead (Biden's open boarders) vs 100,000 dead. Yes, the economy is sinking, but does it matter if your friend, spouse or parent would have died (but didn't).

So the markets would not like what the President said as he “sort of” left the end of the containment time open to change again. The President is focusing on lives more than the economy so that our numbers do not get horrible like the sad instances in Italy where their death rate is approaching 10%.

Part of the reason for Italy's high numbers is POSSIBLY it is hitting at the same time as their seasonal flu time, and the initial ignoring of quarantines by many people. I wish all of the people in Italy health and a speedy end to this.


OIL was a large focal point on the markets today as it was $1.50 higher in the pre-markets, but slid lower throughout the day. President Trump did address oil in his coronavirus talk but it did nothing to prop it higher.

AAPL – despite the stock trading up to 262.49, it closed down 0.52 at 254.20.

SPX closed down 1.6%. This is not fun to people who thought they bought the bottom last week; however, we are not seeing the 5, 6 or 7% moves either. This feels more like consolidation and waiting for good news.


TODAY: April 1


Lower on the open

With the quarter over yesterday, I expect to see hedge funds moving into different names via selling losers to raise cash. We also are at a time when the markets are ready to launch much higher (and fast) but we need good news. The media is making sure we don't get anything positive, and President Trump's speech yesterday didn't provide any either.

The positive takeaway from the speech was that we are hoping to keep the deaths under 100,000. That is about twice what the average flu takes out every year. Yet the market is wanting to hear positive news about the economy. It doesn't care about death. Actually, surprisingly, death is often bullish for the markets.

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.

You’re braver than you believe, stronger than you seem and smarter than you think”.
—Christopher Robin, Winnie the Pooh

Average year with lots of inter42mittent volatility
(-20.0% so far)

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I am hoping that this will be the last of the Q/A sessions for a while so we can resume a normal schedule. This is contingent on market behavior.



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