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

Thursday | October 8, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

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DAYS UNTIL ELECTION = 27

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YESTERDAY: October 7

SPX 3419.75 58.50

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In yesterday's MORNING COFFEE REPORT, I distinctly predicted that after President Trump canceled the Corona virus Bailout Discussions, he would come up with a “Plan B”. HOURS LATER, President Trump tweeted that he was trying to push through a $1,200 check for everyone, and was planning on pushing through a $25 Billion bailout for the airlines. The two specific items I pointed out were addressed.

As a result of these tweets by President Trump, the market opened higher by 23.61 SPX points, and reached an apex of 65.32 SPX points. BOOM. We were down -47 points Tuesday and higher by 58 points yesterday. The net result of canceling discussion with Pelosi where he is being held hostage is +11 SPX points.

The best performers were travel stocks.

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TODAY: October 8

TODAY – More higher.

Last night's debate probably changed nothing. Just like Biden, Kamala refused to answer questions about raising taxes and packing the Supreme Court. Instead, she made grade school angry faces and changed the topics. This sent the markets a little higher as the market is betting on a Trump win, even if they don't necessarily like him. They know Biden will destroy the economy and markets with his tax plans, and are running higher on the assumption the media's prediction Biden will win is wrong (again).

BTW...I am neither a dem or republican. More of a libertarian if anything.

NEXT BIG DAYS:

October 15 – Presidential debate #2
October 22 – Presidential debate #3

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.

2020 ONE-YEAR PREDICTION:
Average year with lots of intermittent volatility
(+5.84% so far)

POT Logo

The class was about Volatility Dispersion (aka Index Arbitrage). It is a tough subject to conceptualize, though easy enough to think about. It is simply a pair trade. Instead of share prices that are “paired up” volatility levels between an index and the equities that make up the index.

This does have practical applications for people who have many equity and index positions, but is a more theoretical topic.

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DISCUSSION BOARD

Up and Running for POT students (so far).

Really quickly...

To help in your quest for the best possible options trading outcomes, we would like to know what level of options trading knowledge and skills you currently have. Please click the button below to indicate what level of trader you are? Please skip if you already responded. Thank you for participating.

P.O.T.

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LAUGH OF THE DAY

Trading is a tough job on a stomach void of coffee and humor.
You provide the coffee and we will take care of the rest.

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Disclaimer

For education purposes ONLY. Please read the disclaimer below. We do not care if you agree or disagree with it—that is the rule. ​​​Stratagem Trading (Stratagem: “StratagemTrade.com,” “Stratagem”), and any of its possible affiliates, respective independent contractors, employees, officers, or agents are not acting as licensed financial advisers, registered broker-dealers,tax advisers, etc. (although some individuals may or may not hold a license). Furthermore, they do not provide financial advice, make recommendations, or conduct business by transacting trades. Stratagem Trading adamantly states that nothing in this communication constitutes a solicitation, promotion, endorsement, offer or recommendation to buy or sell any investment, mutual fund, debt instrument, commodity, derivative product or security as described herein.

Stratagem does NOT offer auto-trades. Case studies being provided are historical examples illustrating how a particular commodity, equity, index and/or option strategy could have been implemented. Stratagem Trading is not providing students with real time trading opportunities, nor giving advice. We strongly recommend that you consult with a licensed financial professional for all your financial matters.

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