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

Friday | May 1, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

image
image
image
image

YESTERDAY: April 30

The day started out with downward pressure after some earnings reports along with the Chicago PMI. The PMI came in at 35.4 (April) vs 39 est. This set the stage for pre-market gains in the Minis to turn red.

The day was choppy and heavy, yet patiently waiting for earnings to come out in many key FAANG stocks after the close – namely AMZN and AAPL.

The market cautiously and prudently sold down by 288 Dow points after the 4 previous sessions were VERY strong. The SPX closed won only 27 points, but felt much weaker.

EARNINGS

After the close, AMZN came out with earnings of $5.01 vs. estimates of $6.359. This was a huge miss and blamed on stupid things like buying 100,000 body temp devices. They did increase their worker's pay by $2 p/h, but that is probably temporary until they are done working them to death. The stock fell $120 per share in the after-markets, but keep in mind it was up 101 going into earnings. If the stock opens -$120 lower, it is only a $20 net change over 2 days.

AAPL posted earnings beats of $2.55 vs an expectation of $2.089 consensus. The stock ran up $6.07 going into earnings, so we could see it lower today despite beating earnings.

In short, a mixed bag for these FAANG names, but probably bearish for the market today.

image

TODAY: May 1

We are on the wrong side of SPX 2900.

April was one of the strongest markets in stock market history, but then market was oversold at its lows. The market is a pendulum that over swings in both direction, and it might have temporarily overshot to the upside.

We saw on Wednesday a close in the SPX that was only 9% down for the year when the market was overbought to start with. In other words, the market could very well have discounted most of the possible negative effects of the virus – shut downs, unemployment, food chain disruptions, etc. It is important to remember than a 10% correction in an overbought market is normal AND healthy.

Yet, the world is still out of balance – what the Hopi Indians called “koyaanisqatsi”. Think about what is going on – and it is only the 4th month into the year. We have not even had the election dirty tricks start yet.

  • We have record unemployment with no date of when things will open again, and how many of those people will be hired back.

  • We have a presidential candidate, that by questionable polls, indicates he is in the lead, but is obviously intellectually impaired and may be sadly suffering from dementia. I stated before the year started, and I still maintain my opinion, that there is NO WAY they don't pull Biden off the stage and try to replace him with a popular woman—Hillary, Michele Obama, ….etc? This was one of my 2020 predictions.

  • People don't realize it, but the world changed. The coronavirus sped up business evolution. We will see retail space and especially office buildings suffer. Companies are learning that unsupervised employees staying at home may work harder than in an office space riddle with “cubicle chit-chat”, “Superbowl pools”, “fantasy football”, office relationships (and bickering), etc. Why rent office space for $25 per sq/ft and have employees commute 2 hours a day?

  • We have a deficit that has ballooned by another $2.2 trillion, and a Fed that just added another $10+ trillion air to the interest rate bubble. The universe is the only thing that expands forever.
  • Kim Jung Un(stable) is auditioning for WEEKEND AT BERNIES.
  • The American people (at least the ones paying attention) have stopped calling me crazy (for now) when I claim China is 10 times the enemy of the US than Russia. They are aggressively trying to F-k us over in technology, medicine, the economy, military, etc. They steal everything, and that is only outmatched by their ability to lie.

  • We have seen governments throw out their Constitutions without people fighting back, all in the name of safety. We have a group of the population that will be frightened for the remainder of their life to go to ball games, concerts, etc. The mental health industry will be overrun. Yet the makers of Lexapro will be fine.

Summary

In short, things are folding inside out and even Nostradamus is needing aspirin for the year 2020. Parking under SPX 3,000 until we can see the horizon makes sense. A little profit taking for the people who had the balls to buy SPX -20%, -30%, or -36% would be the most sane thing anyone did this year.

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
(-9.8% so far)

POT Logo



CLASS Tonight!

TOPIC: Emergency Fix Advanced

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