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

Friday | February 7, 2020

Hello Mayumi.



YESTERDAY: February 6

The market was higher for the 4th day in a row. The media was claiming the market's strength was the result of stagnant growth in the Coronavirus cases, but that is not true. The amount of cases is still increasing, and today, scientists stated you can get the same virus a second time.

This is unheard of in viruses where usually you can only get one strain of virus once – that is how vaccines work. Vaccines give you a dead strain of a virus so your body develops antibodies to it, and you can't get the virus if exposed.

There also seems to be continued concerns and evidence that China is concealing the real story on the virus on everything from its origins, to the amounts of people infected, to the number of deaths, to the travel bans.



The market opened higher and gave back the gains immediately. The SPX went negative by $0.30 on the day, but then went right back up as buyers came in. The market got quiet as if running out of steam, but can you blame it? Since Monday, the SPX is higher by 120 points, which is about 1200 Dow points.


There was a small second selling in the market as Nancy Pelosi came out and spoke. While slurring her speech, Madam Speaker accused Trump of “being sedated”. Mrs. Pelosi then stated that Congress still has the responsibility for Presidential oversight, and are still looking into other things Trump related. This is a not-so-subtle hint that IMPEACHMENT PART 2 – THE SEQUEL is coming. The stock market does not benefit from this kind of news.

Markets pretty much ignored the first impeachment because we all heard the transcript and realized it was a partisan mess not going anywhere. Will it ignore the second one if more vague and well thought out?


TODAY: February 7

Maybe a small pullback, but trend is still higher.

Nothing has changed my opinion about how strong the market is (right now). The fact that the Coronavirus only caused a 3% drop where the lows had the SPX down 0.16% for the year only showed just how strong the market is. Much of the selling last Friday was coming from China hedging because their markets were closed.

As I write, the Minis are lower in the night, but that doesn't mean much. We might be seeing foreshadowing of a slightly lower day tomorrow, but over the next month (at least) we should run higher towards 3400.

Average year with lots of intermittent volatility
(+3.56% so far)

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Be ready on the open. I wanted to illustrate the short butterfly yesterday; however, the SPX was in a tight $5 range most of the day. Hard to get anything directional trading examples shown in that environment



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