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

Friday | March 13, 2020

Hello Friend.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: March 12

Trump's Sell Off

The market was smashed down from the moment Trump finished his speech the previous night. It was hinted that President Trump was going to eradicate the federal payroll tax and offer aid to corporations in the travel industry.

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What the markets got was travel suspended to Europe and a pep-speech that “this too will pass”. NO RED RYDER BB GUN FOR RALPHIE. All the American people were going to get is a pink bunny pajama from our nutty aunt. No Bazooka like we got in 2008.

From this point onward, futures fell until they were right at LIMIT DOWN. The Dow was indicated -1000 points lower on the open.

OPEN

The markets opened and hit the -7% circuit breaker within minutes. Here we waited for 15 minutes before opening again, and then the selling continued.

11:45am CST

Just before traders went to lunch in Chicago, Jay Powell of the Fed decided he would save the day with the mother of all BB guns – The Bazooka. He announced a total of $4 Trillion in stimulus – QE PART 4 – THE MOTHER OF ALL QE.

This took the SPX from -220 to -80 in a matter of minutes. This was not enough for the markets that wanted a lot of things to combat all the school closing, professional sports events closings, airline travel shutting down, etc. Kids can't even see Mickey on spring break because Disney is closing its parks.

Can you imagine that talk to the kids? My grandkids were scheduled to go, and I have to tell you, the 6-year old is BUTT-HURT.

The markets reversed within an hour, and went back to the starting point of SPX 2520. From there, things got worse as Senators announced that they were taking a short week and going home on Thursday with no coronavirus bill completed.

Further selling after finding out that Mitch McConnell and Nancy Pelosi couldn't agree on a bill to help the coronavirus problem as Democrats tried to jam the bill with personal items not related to the virus. Nothing is so bad about the virus that we can't insert a self-dealing politics into the mix.

Meanwhile, the media was beating up President Trump's handling of this by declaring an emergency and closing the boarders late. Lest we forget the swine flu pandemic that infected 20% of Americans and sent 274,000 Americans to the hospital. This eventually killed 1,000 Americans (500,000 globally) and took 6 months before the previous president declared it an emergency.

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SUMMARY

Between the media, politicians and President Trump not delivering what was expected, the market felt like no one was in charge. Meanwhile, we were hearing of school closings, and Costco selling out of water and toilet paper. People know that the virus does not cause diarrhea, but probably need several rolls because they are going to SH&T when they see their quarterly statement showing a -28% loss.

Where is General Patton when America needs him? Jay Powell's efforts were slammed, but at least he is doing something. All of this made it impossible for the people to capitulate in maximum pain.

SURPRISES

SPX closed down 9.51%

Dow closed down 9.99%

AAPL closed lower by 27.20 at 248.23 (9.88%)

VIX closed at 75.47 (higher by 21.57)

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TODAY: March 13

WHO KNOWS – BUT MUCH HIGHER SOON

The markets are finally getting desensitized to the statistics. Every new death is not causing the markets to fall. When a city see a doubling of patients overnight, it is just noise now. The media has scared even the owners of professional sports teams to the brink. Disney is no longer the “Happiest Place On Earth” - it is the MOST EMPTY PLACE ON EARTH – LIKE WALLY WORLD.

We saw the markets fall 28% from the high to the low. The Spanish Flu only saw a 37% market decline, and this is NOT the Spanish Flu.

WE MAY GET DOWN TO 2346 IN THE SPX, BUT I DOUBT WE GO LOWER. WE MIGHT HAVE SEEN THE BOTTOM YESTERDAY.

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 intermittent volatility
(-28.61% so far)

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Over 2 hours of Q/A with a lot of talk about rolling the AAL collar. Hopefully the markets slowly calm down and we can get back to regularly scheduled programming for POT classes soon.

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DISCUSSION BOARD

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Really quickly...

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P.O.T. Schedule to come.

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.

Start of the coronavirus spread.

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