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

Wednesday | May 13, 2020

Hello Eizell.




I expected the market to test 2900, and stated so in the previous day's MORNING COFFEE REPORT. The market opened and ran up to SPX 2945.82 (+15.50), before pulling back to the unchanged line of 2930. There is sat until noon, experiencing a very tight range. Dr Fauci started to speak about the coronavirus in front of Congress where Senator Rand Paul spanked him, reminding him that he is not the “all that ends all”, and the market sank to 2910 before attempting to make a recovery to 2920.

With an hour to go in trading, Los Angeles decided to ignore science and focus on the emotional, electing to extend the lock down 3 more months. Even a resilient stock market can't fight that kind of “thinking” and capitation set in. The market fell to 2900 (as I expected), but instead of bouncing, it invited sellers. On the close, sellers lightened their load and took the SPX cash down -60.73 to settle at 2870.12. The Dow fell 457.21 points. AAPL's large gains were eradicated, and the stock closed down -3.60 at $311.60.


TODAY: May 13

We will see. Either the market was oversold yesterday as Democrats propose another $3 trillion in spending, or something is broken. We will find out today, but I would not be surprised if the market fought its way back to 2900 to see if the selling was real.

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 -35% for the year.

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 inter42mittent volatility
(-11.16% so far)

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