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

Monday | February 10, 2020

Hello Mayumi.



YESTERDAY: February 7

The day was the first day of the week where the market opened and closed lower.


On the open, the SPX opened -$20 points lower with the Dow lower by -250 points after renewed concerns about the coronavirus. This virus is different than past ones (Ebola, Zika, etc.) in that this long into the outbreak, the market had already started its climb back above where the market had fallen from. In the past, we saw the virus outbreak leveling off, but this one we are not. So when we heard news that China was losing control over the virus and probably hiding a lot of cases, not to mention its GDP was suffering as a result, the market opened lower.

30 Minutes Later

After the market hit the lows of the day 2 times, Wholesale Inventory Numbers came out, and the market started to bounce. After that, VP Pence also had an interview on television saying we are going to grow out of the deficit and debt. He also praised China for how they were handling the virus, and the market slowly bounced.

90 Minutes Later

Within 90 minutes of the open, the SPX had climbed almost all the way back to unchanged for the day. It stayed there for a of couple hours before the Fed chairman spoke again.

4 ½ Hours after Open

The Feed came out and warned that asset values (stocks) were elevated, and the coronavirus was adding a new and unforeseen risk to global markets. This spooked the markets to fall again. The SPX made a new low for the day, getting down to 3322 (down -23.66).


On the close, the SPX bounced about 5 points to close down -18.07 (0.54%). AAPL closed down -$5.18. TSLA fell 0.89 to $748.07.


TODAY: February 10

Last Night

E-minis futures fell 0.7% in the start of trading until it was announced that FOXCONN has been allowed to opens its production factory again. Chinese government approval to resume production at a key plant in the northern China city of Zhengzhou then sent the Minis into +7 territory. Minis then backed off and went back to unchanged from Friday's close.


By midnight, Chicago time on Sunday/Monday the Minis were unchanged, and not hinting what lays ahead for Monday. The market wants to go higher; however, there are alarming reports coming out about the coronavirus that makes this particular outbreak look worse than SARS. SARS had 813 deaths, and the coronavirus has already killed more than 900 in only three weeks. On Sunday, the WHO (World Health Organization) director warns that this could be the tip of the iceberg. Others are suggesting with some amount of proof that this is a biological warfare accident. If this is a rare case where things are worse than tempered people expect, it will move the markets lower.

Average year with lots of intermittent volatility
(+3.02% so far)

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It was a busy week with Friday illustrating the SHORT BUTTERFLY spread to wiggle out of a bad trade. I also sent out homework to people in POT, and will be sending the answer out in the morning. Time to have fun!



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