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

Thursday | October 15, 2020

Hello Eizell.





YESTERDAY: October 14

SPX 3488.67 -23.26


In the MORNING COFFEE REPORT yesterday, I said that we could swing between SPX 3500 and 3550, and I am betting on 3550. I was wrong, but the morning started out that way.

3527.64 was the highs for the day, and it appeared that it was going to keep climbing. The brick wall that was hit was a messaged from Steve Mnuchin that stated: ”getting something done on corona virus relief package before election would be difficult”. He later stated that Nancy Pelosi has no interest in getting a stand alone bill to rescue the airlines. That is the democrat's leverage to getting the additional $600 billion in pork thrown into the bill.

So the run higher the market has been undergoing to approach all-time highs was in large part attributed to a $1.80 trillion package, and now it is getting distant. In the chart above, you can see that when the news came out, we fell through the “unchanged line”, and then fell hard moments later after the release of this information.

This news condemned the day to go into the history books as RED, and took the Dow into negative territory for the year. The Dow has been a pig this year, whereas the SPX still is higher by 8%.

AAPL closed slightly positive. This is actually encouraging given their abysmal HIGH SPEED EVENT reviews. Another $1200 for a phone that has 5G, but you can't get yet. And because of the towers not set up for 5G in most places, it will only be modestly faster than 4G. I'll wait until the phone is $600.


TODAY: October 15

TODAY – Melancholy

The market is running out of steam. Caution is coming out as the election is now 19 days away. Dashing hopes of a stimulus package in the next 3 weeks is equivalent to someone peeing in the party's punch bowl. Political bickering is doing little to elevate moods. Pelosi is threatening to use Article 25 to remove Trump and a senator is threatening to have Nancy Pelosi removed for the same thing.

The market has gone from Tigger to Eeyore in personality yesterday.


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
(+7.98% so far)

POT Logo

Class lasted almost 3 hours yesterday as we covered trading legs. We had a lot of take-aways on it. We reiterated how the quotes one sees as the “mid-price” on a broker's screen is just that – 'mid-price' of quotes.

It is NOT necessarily the real market price. We went into selling butterfly spreads and condors to spread off a bad leg for later. We even legged single options to get into a wide condor for free.



Up and Running for POT students (so far).

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Trading is a tough job on a stomach void of coffee and humor.
You provide the coffee and we will take care of the rest.



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