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

Thursday | April 9, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: April 8

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


From MORNING REPORT on March 20, 2020

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This was a day filled with news.

ONE

There was a report that Johns Hopkins was getting approval for the next phase of testing “convalescent serum therapy”, which has been around since the 1890's. It is a proven technique that has worked with the H1N1, SARS, polio and ebola.

TWO

The White House is meeting with Saudi Arabia and Russia on what could be a 10 million b/p/d reduction in pumping. This news sent crude futures up 8% and sent the markets on a strong upward trajectory.

THREE

The projected number of deaths from coronavirus has been lowered once again. It was estimated that as many as 2.2 million Americans would die. It was later revised lower to 240,000. Last week Dr. Fauci and President Trump said that they are trying to get the number under 100,000. Yesterday, they estimated the number would be closer to 60,000. This is not far from the number of ventilators NY Gov. Cuomo said he needed just for NY.

Though it is sad when any death occurs, one must keep the numbers in perspective. The flu killed 66,000 last year. There was NOTHING else the market could do but accept this as good news.

So after spending $2.2 trillion and wrecking portions of the economy, the optimism is there that things may work out not only better than feared, but better than hoped.

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This sent the Dow higher by 779.71 points, and the SPX higher by 90.57 points. AAPL closed up 6.64 points (2.56%) at 266.07, and American Airlines (AAL) closed up 1.11 at $11.33 (10.8%).

Yesterday, I stated that I expected a slight pull back on the open. The market's low was a positive +3.89 in the SPX. It was in the green, but barely. The unexpected news is what sky rocketed us higher, including help from Comrade Sanders, who essentially dropped out of the race. Time for another beach house. It is amazing how a socialist has more homes than Bill Gates.

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TODAY: April 9

MARKETS ARE CLOSED TOMORROW IN OBSERVANCE OF GOOD FRIDAY

We have had such a run higher it would be hard to imagine we are going up again. We are only down 14% for the year in a market that was overbought to start with, and needed a 10% correction to be healthy. Right now we are about in a place that a normal correction would have taken us anyway without the coronavirus.

Given that the we are spending $2.2 trillion on the economy, interest rates are essentially at 0%, and many businesses will be closed forever, we should probably not be this ahead of ourselves – yet. But it is also hard to not imagine us not testing SPX 2,800 today going into a long 3-day weekend when President Trump said last month “give me until Good Friday and things should be better”.

I understand how people find him frustrating, especially if you have to run against the guy for office. Poor Joe. He has, however, been more right about everything so far than even the experts – thankfully. You may hate him, but be grateful he was right.

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
(-14.8% so far)

POT Logo

It was a great POT class last night. We transitioned from the last 3 weeks of Q and A sessions to going back to class topics. We spent half of the class answering questions such as overlapping strikes on Rolling Thunder spreads. The other half of the class we started an overview into the “5 Year Millionaire” spread that is always interesting.

People may be confused now on how we turn the collar spread inside out, but you will understand I shortly. Simply we are focusing on making money on options with the stock as a hedge, where as collars we try to make money on the stock with options as a hedge.

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DISCUSSION BOARD

Up and Running for POT students (so far).

Really quickly...

To help in your quest for the best possible options trading outcomes, we would like to know what level of options trading knowledge and skills you currently have. Please click the button below to indicate what level of trader you are? Please skip if you already responded. Thank you for participating.

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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Disclaimer

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