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

Tuesday | February 18, 2020

Hello Mayumi.



YESTERDAY: February 14

Great Morning!

I hope everyone enjoyed their elongated weekend and Valentine's Day. Thanks George Washington and Saint Valentine of Terni (not to mention Pope Gelasius I)! St. Valentine was even mentioned by Ophelia in Shakespeare's Hamlet.

Open For 2.5 Hours

On news that China was simulating their economy and were finally “coming clean” on death accounting, the markets opened higher for the first 2 ½ hours. The SPX got as high as 3,380.69, closing in on another big number – 3,400. The Dow got within 100 points of its 52-week high.

2.5 Hours Until Last Half Hour

As has been the case of late—higher opens see a subsequent fall, and lower opens see a subsequent bounce—the jump higher on the open fizzled out. The SPX had a high net change of +6.75 and sank to a low of a negative net change of -7.79 (3,366.15). Despite the see-saw in the market, the action was quiet and in a tight range.

Last Half Hour

The SPX had a +11 point jump higher in the last half hour with the cash closing just under the highs of the day at 3,380.16 (+6.22).


Most of the volatile stocks for the last month were stuck in the mud. AAPL closed up $0.08. TSLA has had a crazy run higher and closed down -3.97. BA closed down -2.33. Marijuana and fake meat companies were the big winners, while oil continued its fall on lower economic activity predictions.


TODAY: February 18


Every Bungee Cord Eventually Snaps.

So far, we keep bouncing because of the Fed's QE #4, international rate lowering, corporate buybacks, and Trump tax credits. We can keep bouncing, and hard, if this coronavirus shows signs of fizzling out.

NOW... scientists at Los Alamos (the lab where Oppenheimer, Feyenman, Enrico Fermi, Edward Teller (Father of hydrogen bomb), Leo Szilard, Hans Bethe, Niels Bohr, etc) are predicting that the coronavirus will not be contained, and 4.4 million will die.

That will slow the economy down hard. This will slow corporate earnings and hit the stock market. AAPL this weekend already cut its guidance because of the virus.


We are also seeing MORE BS from China with their housing data. They are showing price increases despite developers offering discounts, and still unable to sell. I have been saying for MANY years they are a giant Ponzi scheme—and now we are finally seeing the Emperor's new clothes.

Their economic minister or statistics minister must be Jon Lovitz – you know....the guy married to Morgan Fairchild.


Why is the stock market still running higher? That is how bull markets move. They ignore all bad news. The markets having been taking news of China stimulating their economy as a positive, but if the virus worsens, it will be like trying to stop an economic avalanche with a shovel.

In 1929, the stock market ignored soaring interest rates on an economy given easy credit (for the first time for washers, refrigerators and the Model T car), slowing sales, etc. Stocks kept soaring until the birth of the Great Depression—October 24, 1929. We saw a DOT COM bubble that EVERYONE knew was overdone continue to run higher for another year (or two) before falling.

Average year with lots of intermittent volatility
(+4.62% so far)

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