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

Wednesday | May 20, 2020

Hello Eizell.




I both love and hate anticipation of expected events.

As a child, the week leading up to Christmas mysteriously changed space-time making hours seem like days. Only specials like A CHRISTMAS CAROL and FROSTY broke up the time.

I believe there is no way Biden will be allowed to run, but with the DNC convention being held in July, time is running out to get him to quit. A trickle of dementia rumors (and behavior), sex scandals, payoff scandals to his son (and Romney's and John Kerry's) Ukraine recordings are coming out to gently force his hand – perhaps?


Now we are waiting to touch the 200-day Moving Average which coincides with SPX 3,000, a huge psychological number, seems almost inevitable now. We got as high as 2964.21 yesterday, just 1% away. This was a creep higher day after Monday's HUGE run higher of 911 Dow points and 90+ SPX points.


Near the end of the day, the anticipation of it being reached was thwarted after a publication slammed Moderna's vaccine trial as not being the breakthrough we were hoping for in the fight against the coronavirus. The +10 point SPX move higher immediately reversed, and the markets were slammed down -40 points lower (net -30 on the day) by the close.

Stocks like AAPL that were higher by +$3 closed down -1.82.



I almost anticipated a slight pullback lower yesterday as I mentioned in the MORNING COFFEE REPORT. I was expecting little movement as we consolidated after a huge move, which is what we had until the news about Moderna came out.

Alas, it is just a temporary condition.


TODAY: May 20

SHORT TERM – HIGHER – at least until Powell's Fed Minutes are released.

MEDIUM TERM – HIGHER, testing 3,000 (200-day MA = 2997)


Yesterday's selling at the close was stupid and an over reaction. I didn't bother getting short as I did not anticipate us falling to a net change of -30 in the SPX. Weeks ago, we saw the same event come out as the Chinese trash talked some of our treatment medications, only for positive news to be released the following day.

Since the selling was BS, I anticipate a bounce back to the “scene of the crime”, or starting point of the selling. As a matter of fact, I was hoping for selling in the night session in order to get long the market; however, it has not come. At the time of this writing, futures are firm and positive by $15 points.

We do have the Fed Minutes today that have been non-events for the most part, but still something of concern.

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
(-9.53% so far)

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