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

Thursday | July 23, 2020

Hello Eizell.




The entire day was boring until the close. The SPX was in a range of +11 to -4 all day, and very slow moving. The market tried to stage a rally time and again, but failed with a slow trickle of negative news all day. There was also concern about earnings that were going to come out after the close. We are just starting the real names during earnings season, and traders typically are jittery until about 50% of the names have reported.


On the close, there was large buying as Chipotle, MSFT, TSLA and Sands were about to report.

Above are the names reporting for the rest of the week.


TODAY: July 23

TODAY – RUN FOREST RUN – still going higher.

LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off – probably after the election.

The market is down in the night session, but I am not too worried about saying we will probably go higher. Prior to the open, Twitter, American Airlines, Southwest Airlines, etc. are reporting.

Typically during earnings season (of late), we do 2 steps forward and 1 step back. The market tends to climb higher in a nervous fashion until at least 50% of the companies in the S&P report. This means that I am bullish, but it doesn't mean we won't fall backwards on any given day.

You also have to keep in mind that the media is still playing games with the coronavirus that tends to move the markets for a few hours at a time. One day there is a vaccine coming, the next day it isn't going to work – repeat. This too will keep the rally higher muted. Lastly, we have an election coming up in 103 days, and it is just a matter of time before the media starts trying to sell us on Biden winning. Biden's tax plans are horrific for the markets, and if traders actually believe the story, the markets could sell off.

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 intermittent volatility
(+++++1.40% so far)

POT Logo

We had a great class yesterday during trading hours. Though we did not get a perfect ledge to demonstrate “fading the open”, everything I wanted to show was done. We had the extra benefit of seeing the market do the “unchanged fear” move where on the way down, it falls underneath and bounces. It does the opposite on the way higher. I USE THIS A LOT.



Up and Running for POT students (so far).

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