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

Thursday | September 3, 2020

Hello Eizell.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: September 2

SPX 3580.84. The fourth day above 3500, and close to 3600.

The markets set yet another record, and the SPX is now higher for the year by almost 11%. We did see something different occur. In the past, we have seen occasional selling in the leaders like AAPL, TSLA, ZM, AMZN, etc. When the selling occurred, the money stayed on the sidelines so the indexes would sell off as well.

Yesterday, we saw AAPL fall -2.1%, TSLA fall -5.8%, ZM fall 7.5%, etc. These had been high flying stocks that helped give the markets buoyancy and guidance. When these leaders sold off yesterday, it did not drag the market lower, instead the market went higher as the money was reinvested in other names.

Yesterday was a shift and rotation of assets. The overbought was sold to invest in the over sold. This is how many professional fund managers keep their inventory under control to avoid a lopsided portfolio, but we have not seen it this obvious in a while. The markets, in other words, have shifted to the last leg of the bull market (in my opinion).

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TODAY: September 3

TODAY – STILL STRONG and getting stronger.

LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off – probably after the election (This one has been here for WEEKS. Nothing changed).

DAYS UNTIL ELECTION = 60

We went from 3500 to close to 3600 in 4 days. It is obvious there is a feeding frenzy on. Some of the buy is speculation and riding the wave, while other buying is actual late-to-the-party long term positions.

When we actually do get reason to pull back to the downside for a day, we will get rid of the speculators, but more buying will come from idle cash.

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We have 60 days left until the election. The games will begin in earnest. Expect more riots and corona scares. I don't believe in coincidences, if it is not an act of God. How are they keeping it a secret who is paying for convoys of “peaceful protesters” to destroy cities? It is not a secret, the media just will not admit it.

NEXT BIG DAYS:

Sept 29 – Presidential debate #1
October 15 – Presidential debate #2
October 22 – Presidential debate #3

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 -36% for the year (this has been here since January 1).

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.

2020 ONE-YEAR PREDICTION:
Average year with lots of intermittent volatility
(+10.84% so far)

POT Logo

The class was slightly different than most. Typically, we talk about a strategy, how it works, how it is best used, etc. Yesterday was more of a 60-day game plan of lining up HUGE amounts of downside protection should we see any major falls between now and the end of the election.

I KNOW the media says Biden is going to win, so those who still believe the media is unbiased believe it.

Maybe the media is smarter than the market, but the market believe Trump will win.

A surprise Biden victory, or a contested election, mail-in voter fraud claims, etc, could shock the market to the core. We want to be ready for this, especially given how far off the bottom the market is, but want it without much cost. Last night was that discussion.

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DISCUSSION BOARD

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Really quickly...

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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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