image
Stratagem
Facebook Twitter YouTube

Having trouble viewing this email? Click here

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

Thursday | May 21, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

image
image
image
image

YESTERDAY: May 20

I stated in yesterday's MORNING REPORT that “Yesterday's selling at the close was stupid and an over reaction”. I predicted a day higher because of anticipation leading up to the Fed meeting and a remedy to the previous day's stupid sell-off.

image

The news on Tuesday was nuts, and we only sold off 40 points from the high to the close because of nerves (or the lack of). We made that ALL back on the open, and then kept going.

The SPX opened +30 points higher and climbed to a high of +57, led by tech stocks such as AAPL which closed up $6.09. We did have two slight/minor pull backs. The first was news that the Chinese stock market was falling because the US Senate passed a bill to limit US-listed Chinese firms. Fear or reprisals had the algorithms selling slightly. We worked our way back to the highs and then the Fed announced, which caused another 10-point decline before bouncing again.

The day can be best described as “sitting around waiting for 3,000, but getting tripped twice along the journey.

Remember that SPX 3,000 is the 200-Day MA, and a HUGE support/resistance number.

image

TODAY: May 21

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

LONG TERM – NEW ALL TIME HIGHS.

The minis in the night session are lower by 16 points at the moment. The cause of the move lower in after-hours trading is likely a spat between Trump and China. China is thanking Trump for being comical and making China strong, while Trump is blaming China for lying about the virus.

image

BELOW 2950

All of this sent futures below 2950, BUT I AM NOT WORRIED. Most people seeing futures below this key number in the middle of the night would predict a lower open; however, these things have a very short half life. Eventually we realize that every time China complains, it is because they are hurting.

We will very likely see this ratcheting up with tensions and tempers flaring. Neither Xi nor Trump are the type to pay quarter or back down. Even with the most to lose long term, China still acts as if it controls the board game.

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.

2020 ONE-YEAR PREDICTION:

Average year with lots of inter42mittent volatility
(-8.02% so far)

POT Logo

CLASS LAST NIGHT

I called an “audible” and changed the topic based on the deluge of questions coming in. The topic was the BOX SPREAD and DRAGON FLY. With the BOX, we discussed how to price spreads off of the BOX, who to hedge ITM spreads, the 3-Leg BOX, synthetics and arbitrage based on the BOX. This is a MUST class for any trader. Seriously, and NOT a sales pitch.

image

DISCUSSION BOARD

Up and Running for POT students (so far).

Really quickly...

To help in your quest for the best possible options trading outcomes, we would like to know what level of options trading knowledge and skills you currently have. Please click the button below to indicate what level of trader you are? Please skip if you already responded. Thank you for participating.

P.O.T. Schedule

image

LAUGH OF THE DAY

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.

image

Disclaimer

For education purposes ONLY. Please read the disclaimer below. We do not care if you agree or disagree with it—that is the rule. ​​​Stratagem Trading (Stratagem: “StratagemTrade.com,” “Stratagem”), and any of its possible affiliates, respective independent contractors, employees, officers, or agents are not acting as licensed financial advisers, registered broker-dealers,tax advisers, etc. (although some individuals may or may not hold a license). Furthermore, they do not provide financial advice, make recommendations, or conduct business by transacting trades. Stratagem Trading adamantly states that nothing in this communication constitutes a solicitation, promotion, endorsement, offer or recommendation to buy or sell any investment, mutual fund, debt instrument, commodity, derivative product or security as described herein.

Stratagem does NOT offer auto-trades. Case studies being provided are historical examples illustrating how a particular commodity, equity, index and/or option strategy could have been implemented. Stratagem Trading is not providing students with real time trading opportunities, nor giving advice. We strongly recommend that you consult with a licensed financial professional for all your financial matters.

COPYRIGHT (c) Material 2019 | Stratagem Trading | StratagemTRADE.com

here.

If you wish to no longer receive our newsletter, you can unsubscribe here.

Stratagem Trading 1000 W. 15th Street #243 Chicago, Illinois 60608 United States