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

Monday | August 10, 2020

Hello Eizell.




After Row for the NASDAQ closing higher, I stated in Friday's MORNING COFFEE REPORT that we were due for a down day. I pointed out that we will open lower because of the extended covid benefits debates in Congress are going to probably start out far apart. Congress had to the end of the day to reach an agreement, and they (almost) never agree on anything ahead of time – except for wars.

We did open down $15 SPX points, surfaced to unchanged for air. We dove down again, and bobbed up again. This repeated the whole day until the close where a run higher on the bell took the SPX into the slightly positive territory.

NASDAQ stocks, which have been very strong were lower with the index closing down 127 points (1.13%) despite the Dow and SPX closing marginally higher. Other than looking at AAPL closing down -11 points, if you looked at the markets at the end of the day, you would be hard pressed to think anything really happened.

It would have been a good day to take off if you were trying to sneak in a 3-day weekend.


TODAY: August 10

TODAY Choppy but higher.

LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off – probably after the election.

Whether you like Trump or hate him (there doesn't seem to be a middle ground), one has to give credit where credit is due. On Saturday, President Trump put the masters of Russian collusion, spying, and fake impeachment in “check”. Trump issued an executive order to extend the covid payments temporarily until Congress can come to an agreement.

Of course the other side of the aisle always screams “foul”, and claim it is illegal and “slop”. They can't/wont come to an agreement so Trump force one through. Now if the democrats try to stop the temporary “free money” to people, they look uncaring and as obstructionists.


I am pretty sure they know it was a brilliant move by Mnuchin and Trump, even though they are screaming. I am not happy when someone takes my queen or when the house in Vegas draws 8 cards without busting to get 21.

This should speed up an agreement that could come by the end of the day, which will be bullish for the market – at least temporarily.

We are 40 SPX points from a new ALL TIME HIGH. Think about that. We have to at least test that number.

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
(3.71% so far)

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