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

Thursday | October 22, 2020

Hello Eizell.





YESTERDAY: October 21

SPX 3435.56 -7.56

It is getting a little nuttier every day leading up to the elections. Monday and Tuesday saw the market make dramatic moves in very short periods of time. The move was so fast that unless you were already on the right side of the trade (prior to the news), you could not get on the moving train.

A look at the chart above illustrates how fast and regular large moves occurred. Below in the chart is a summary.

We ended with the SPX closing down -7.56 in a last minute drop for 3450 to 335.56.


TODAY – Hostage Situation – Hard to negotiate the markets in these situations. Like in 2016, the FBI is adding volatility.

Last night at roughly 6:30pm Chicago time, the FBI had a special news conference to state that Iran and Russia were trying to interfere in the election.

The FBI stated these two countries were allowing the spread of false information. I am so confused how it is different from our our false information that is coming from the media and Congress. Hell, I am at the point where I pretend I am doing a “George Costanza Opposite Day” in order to interpret the news as it actually occurred.

This is the year of fake news. Just when we got done with 4 years of fake Russia news, it is starting again.

With this news, the Minis fell from an after hours +2 to -30.


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
(+6.34% so far)

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Class last night. We discussed adjusting trading style for the last two weeks going into the election to not get caught in this volatility. We also covered entering orders with delta contingencies. We also talked about hedging SPX options with Minis. Lastly we talked about starting a new trade of 5-YEAR MILLIONAIRE strategy starting today or tomorrow.



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