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

Monday | April 6, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: April 3

What it all comes down to
Is that everything's gonna be fine, fine, fine
'Cause I've got one hand in my pocket
And the other one is giving a high five

—Alanis Morissette


FROM MONDAY'S MORNING REPORT: March 23, 2020

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It was another day of the airline stocks being murdered while the market struggled to find optimism. The President's daily briefings are lacking optimism, rather erring on caution. We also get Gov. Andrew Coumo doing his daily “Henny Penny” impersonation about the world coming to an end.

I am still confused how New York needs 50,000 vents, when the CDC estimated the whole country needs 32,000, but that doesn't stop the well-meaning Governor from scaring people daily telling them how ill-equipped they are. This is very hard on a stock market.

Yes, it is very sad how hard New York is being hit by the coronavirus. Mayor DeBlasio and Dr. Oxtris Barbot (City Health Commissioner) made matters a mess by telling people in the city “in the city itself their risk is low, and our preparedness is high. So we are telling New Yorkers, go about your lives. Take the subway. Go out. Enjoy life. We also know that if it were likely to be transmitted causally, we would be seeing a lot more cases.”

SEE THE LINK BELOW:

https://www.youtube.com/watch?v=hIVUpx8pawI

MARKETS

All of these press conferences helped eradicate the gains the SPX saw on the open. With the SPX opening higher by 11 points, the negative press was a slow and methodical drain on the markets. We made the lows at 1:15pm Chicago time with the SPX hitting 2460 (-66.54) before bouncing to close at 2488.65 (-38.25, or -1/5%).

Between the possibility of a longer quarantine that previous discussed, and higher oil prices the travel stocks wee hit again.

AAL – (American Airlines) was down 0.67 to close at 9.39 (-6.7%).

HLT – (Hilton) closed down -1.92 at 55.94 (-3.32%)

GAINER

The big gainer on the day was crude. Oil had been dipping below $20 at the start of the week, but news of Trump cutting a deal with Saudi Arabia and Russia to limit production sent the futures up to $29 by Friday's close. The USO oil ETF had been as low at $4.03 earlier in the week, but closed at 5.90 on Friday. This was a 47% bounce.

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TODAY: April 6

BIGLY HIGHER ON OPEN

Sunday night, President Trump spoke and told the nation about the progress the administration and nation is making. They have now stockpiled 29 million doses of chloroquine. Millions of N95 masks are being distributed.

More importantly, the President spoke of Italy and New York's numbers of infected starting to decline. This is the FIRST sign of optimism that our quarantine NPI (non-pharmaceutical interventions) practices are working.

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HOPE

For weeks, I have been saying this market does NOT need a total infected or casualty number to run higher. All it needs is HOPE. People love hope. They have not had in in a month. This is the first sign of hope, and we might hit limit up based on it.

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.

You’re braver than you believe, stronger than you seem and smarter than you think”.
—Christopher Robin, Winnie the Pooh

2020 ONE-YEAR PREDICTION:
Average year with lots of inter42mittent volatility
(-22.97% so far)

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A separate update is coming.

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