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

Thursday | March 26, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: March 25

What it all comes down to
Is that everything's gonna be fine, fine, fine
'Cause I've got one hand in my pocket
And the other one is giving a high five

—Alanis Morissette

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At 1:00am Chicago time, the House came to an agreement over the $2 trillion coronavirus stimulus package. After that, the night session became a volatile ping pong match with the Minis bouncing between -35 and +20.

MARKET HOURS

The market during normal trading hours opened moderately higher before falling. Perhaps it was a case of muscle memory where all previous efforts to stimulate the economy sent the Dow down -1000 points, but the market immediately fell with the SPX hitting a low of -40.

It is helpful to recall that the Fed has been pulling its weight by having 2 surprise rate cuts of 50 bps each, and many instances of hundreds of billions of monetary stimulus. Each time the Fed did this, the market fell dramatically after an initial temporary rise.

Once the initial knee-jerk reaction and fear of a “buy the rumor / sell the fact” event was over, the market began a steady and strong advance throughout the day. The SPX hit a high of 2571 (+124.09). About 300 of the Dow points alone was Boeing.

Travel Industry

The travel industry stocks were the big gainers with Boeing being the beast.

Boeing (BA) gained 31.05 points (+24.32%) closing at 158.73. It is important to remember that this stock was at 89 a few days ago, so hitting a high of 174 yesterday was a huge event. HUGE.

American Airlines (AAL) gained 1.47 (+10.56%) closing at 15.39. This stock was below $10 last week.

Delta Airlines (DAL) was up $4.21, closing at 31.10 (+15.66%).

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Butt-Hurt Bernie

This bill had been in the works for a long time, and came across many hurdles. When Mitch McConnell (R) and Chuck Schumer (D), along with Nancy Pelosi come together in an agreement on anything, it is a a remarkable event, so the world assume it was a “done deal”.

In the last 30 minutes of trading, Bernie Sanders decided to put partisan politics to advance his rapidly ending career ahead of the wants, demands and needs of 340 MILLION Americans and throw a wrench in the gears. Perhaps he needed a new summer home?

Millions of people are afraid of losing their jobs (or lost their jobs already), can't look for a new one, and even if they could, businesses are closed and not hiring. They are afraid of not only dying from a virus, but starvation. Bernie Sander's self promotional antics are causing a large amount of stress to many Americans.

Shortly before the close, Bernie stated “I am prepared to put a hold on this bill until stronger conditions are imposed on the $500 corporate welfare fund”. The money goes to corporations IF they agree to NOT fire employees. That is just welfare—which Bernie has always been a fan of.

This caused a major market disruption that took the SPX from its resting area of 2555 to close at 2475, or 80 points lower. That was an 800 Dow point drop.

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TODAY: March 26

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HARD TO SAY

It all depends on the politicians and the games they want to play while American's suffer.

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 inter42mittent volatility
(-23.38% so far)

POT Logo


A great 3-part class last night that discussed why the VIX was going up when the market went higher; how I priced condors this week, why I would turn a long call spread into a condor in a rapidly advancing stock like Boeing, etc.

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DISCUSSION BOARD

Up and Running for POT students (so far).

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.

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