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

Wednesday | May 27, 2020

Hello Eizell.




The day started with NO DOUBT that the market was going to open through SPX 3,000, a number we have been eyeballing for weeks.

After good news about virus deaths, potential vaccines etc., the SPX opened at 3,021.72, the highest level since March. Travel stocks like airlines, cruise ships and Boeing opened the strongest. Meanwhile, MRNA got beaten down hard after studies showed it had almost zero benefit.

BOEING (BA) closed up 5.2%, AAL closed up 14.85%, CCL (Carnival) closed up 12.6%, on reports that the economy is going to open strong.

After the open, the market backed off a little and the SPX sat in a range between 3005 and 3015 until near the close. KEEP IN MIND that the market almost never closes above a big number (like 3000) the first time. On the close, the market got news that President Trump and Mike Pompeo were in talks to determine who in China may have assets frozen, travel restricted, etc. This sent the SPX from 3010 to 2988, before closing at 2991.77.


TODAY: May 27

TODAY – Higher – close above 3000
MEDIUM TERM – Consolidation around 3,000
LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off

Have been saying for weeks that we will get to 3,000. I have also been saying that we almost NEVER close above a big number the first time touched. This is why I bought put spreads when the SPX cash was at 3012.

We typically close above it after the 2nd or 3rd attempt depending on how much buying needs to be done. With $5 trillion on the sidelines....there is a lot of buying that needs to be done, which will cause a bubble up before the POP in a few months.

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
(-7.42% so far)

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Class tonight. Last week, we talked about the BOX spread. People loved it so much we will be doing it again tonight, along with ViPars and condors. This will be the definitive class on BOX SPREADS so we can move on, but a thorough understanding is needed to be better than an intermediate level trader.



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