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

Tuesday | May 19, 2020

Hello Eizell.




What happens when you have a Federal Reserve that comes out and says it can print as much money as it wants/needs, and at the same time there are reports that a vaccine for the Wuhan “man made” Flu is near? You get a 900-point bounce in the Dow.

In yesterday's MORNING COFFEE REPORT, I stated that we were probably going to breach 2900 in the SPX. I did NOT count on 2950, but who can expect news like Powell made?

The market opened 50 SPX points higher and kept running until it reached +100. It sat in a range of +90 to +104 before pulling back slightly on the close. FAANG/FAAMG stocks slightly under-performed the overall market, indicating people were selling the stocks that led the bounce off of the March lows.


TODAY: May 19

SHORT TERM (one day) – Possible slight pull back or consolidation at 2950 area.

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


In the meantime, China will slowly sink economically as the US starts to move companies to India, Vietnam, etc. It would move to the Philippines too; however, Duterte is too unpredictable to deal with. China has nothing but cash flow and a veneer of power, but it is built on a foundation of theft and decay.

Everything with China is a shortcut that will unravel, but when they realize Trump called their bluff (knowing China only has a 3, 5, 7, 8, and Q) they will have two choices – rebuild or retaliate. This will cause a LOT of market disturbances, but not for a while.

The SPX is down only 8.57% on the year. How nuts is that? No one can understand why we are not lower, which is why there is so much cash on the sidelines, which is why we are moving higher.

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.


Average year with lots of inter42mittent volatility
(-8.57% so far)

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