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

Tuesday | August 25, 2020

Hello Eizell.



YESTERDAY: August 24

We stated in the MORNING COFFEE REPORT last week that the market was stuck and banging its head at the SPX 3400 ceiling, but once through, we could see a giant run higher. We have been stuck in very tight ranges and net changes, but that will likely change above 3400. Short covering and money on the sidelines being put to use could create a feeding frenzy.

Yesterday, we might have seen the start of it.


I even stated in yesterday's Morning Coffee Report that the market will jump once the majority of stocks being forgotten start to be bought, and it is not just a tech rally. That is exactly what happened. Recently, the two strongest stocks, AAPL and TSLA, have been leading the market higher, but yesterday they struggled. Dead stocks like Boeing (BA) were the ones leading the market. Boeing was up 10.77 (close 178.27), or 6.43%, where as the over all market closed up 1%.

On the close, there was a lot of buying that appeared to be capitulation, and shorts throwing in the towel. The SPX closed up $34.12 (1%) at 3431.28, well above the 3400 ceiling.


TODAY: August 25

TODAY – Strong again.

LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off – probably after the election (This one has been here for WEEKS. Nothing changed).

I am not a bright man. I struggle with simple things like: Why is a bra singular and panties plural? Perhaps a trip to the Amazon will reveal the answer? (Hoping at least one person got the joke). Yet, I am smart enough to see the obvious, something that the world is trying to avoid like ostriches with heads in the ground.

This market should continue its run higher for a little while. When rates are at zero and real estate is “iffy”, especially in large cities like LA, San Fran, Chicago, New York, etc., where else can you put money? This is why a company like AAPL can see its stock go higher by $140 simple after announcing a stock split. Perhaps if they announced a 10:1 split the stock would be at $1000 (LOL)?


If you love falling markets please do not despair. We will likely have one before the election. Nothing would give some politicians running for office a greater laugh than the market collapsing. What will cause it? Government shut down? Corona 2.0? Riots and Cities closing? Maybe something new and out of the box?


Sept 29 – Presidential debate #1
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
(6.21% so far)

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Time for fun. We finally have a market moving! There is NO GOOD NEWS out there and the market is higher by 6%, can you imagine what will happen when good news comes?



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