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

Friday | October 16, 2020

Hello Eizell.





YESTERDAY: October 15

SPX 3483.34 -5.33›


In the MORNING COFFEE REPORT yesterday, I stated the mood should be “melancholy”. After a long week of running higher, with an explosive jump through 3500, I felt the bull was still in place but had to play with 3500.

I am not a smart man. I still don't know at what age is it appropriate to tell my dog that he's adopted. I do know, however, that after 200 SPX points in a week, the market needs a breather – especially around big numbers.

I was NOT expecting a move of -47 points on the SPX on the open. The reason the media gave was “losing optimism that a stimulus deal would be done by the election”. That is NOTHING NEW. We have been hearing that throughout the run higher, and ignoring it.

After the initial shock on the open, the day was quiet and a little boring/depressing. Maybe even a little melancholy, but slightly different than the slow decline I was expecting.


Goldman came out in the morning and downgraded tech companies, probably because they were short them and needing to buy them back. Also, there was growing concern that a second wave of Corona would was coming as cases in Europe were climbing – whatever that means? It was reported that cases in Italy shot up 20%.

If 5 people have Ebola and a 6th gets it, that is a 20% increase, but nothing to alarm anyone. The markets caught on by the end of the day. In the last 30 minutes, the Minis and cash pierced the “unchanged line” to go in the green before last minute sellers came in. The opening was anticlimactic to the close with the Dow being down -19.80 points.


TODAY: October 16

TODAY – no idea. I was thinking we would test 3500 in the SPX again. But who knows what events the media will “create” (not report).

There are 18 days left. Things are too unpredictable until the market gets to extremes in one direction.


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.

Average year with lots of intermittent volatility
(+7.82% so far)

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