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

Wednesday | February 26, 2020

Hello Mayumi.



YESTERDAY: February 25

Tuesday Summary:

The day started with the SPX and stocks moving higher until a slow and steady drip of of negative coronavirus news poured in.

Opening $21 higher, the SPX saw components like AAPL, FB, etc. opening several dollars higher. Then news came out that Spain had a case of the virus, which took the SPX into the red.


Next a case in Austria showed up. Later Iran said it had 15 deaths and 100 case. Switzerland then announced it had a case. Italy locked down an entire hotel. Later, HHS Secretary Azar announced there was a shortage of 3M masks. Later, Italy announced its cases spiked to 322 with 10 deaths. Germany was next with a patient testing positive.

At this point, the SPX had slipped to -$50 on the day, but was trading in an orderly fashion until the CDC announced “Americans should prepare for community spread”. The World Health Organization came out and stated it is not ready for the virus to spread. I found this kind of obvious. Of course no one is ready for the virus to spread. Have you ever been to an ER room and waiting for hours without a coronavirus outbreak? Later, the CDC came out on CNBC and said a pandemic is not a question of “if” but “when”.


With the markets seeing an average of over 2 negative headlines every hour from respectable sources, even the most optimistic individual had to question the sanity of being long shares.

SPX – The high of the day saw the SPX up $21.10 and the low saw the SPX get to 3113.77 (down -107.12). At the highs of the year, the SPX was up about 5% and now we are down almost 4%.

AAPL – Closed down -10.10 (3.39%) at 288.08. The stock was at $327.85 a couple weeks ago ($39.77 higher), meaning it is 12% off the highs. This is not surprising as I have been talking in POT class how the graph is parabolic and not healthy.

MRNA – Moderna, Inc is a pharmaceutical company that we just started to watch since the “plague” started. They announced today that they sent a vaccine to the CDC for approval to treat the coronavirus. The stock closed up 27.8% at 23.76 (+$5.17).

FDX – The stock closed down $9.25 at $145.60 (-6%) on fears of a global slowdown. Just last week, we did very well in a legged butterfly example with a center strike at $165. The stock was running higher because of the surgical masks being shipped to China. Now the same virus is hurting the stock. It is all perspective.


TODAY: February 26

Who Knows?

It is all news related. The market was set to bounce yesterday, until the media decided to sell fear. Let's face it.....

No one knows what the coronavirus is right now other than it was probably a biological weapon that got out. They “think” some A-hole in a lab in Wuhan was taking the dead animals and selling them for food at the local market. They don't know if the incubation period is 7 days or 21 days. Whatever they tell us, we don't even believe anymore.

BUT..from what we know is it will kill about 2–3% of people – mostly those who are elderly or sick. Essentially, it is very similar to the flu every year, except we just got done with the flu season. Now we have a second one.

Most of the selling is more based on fear of a global economic recession from the disease and a supply chain shutdown, rather than the flu itself. As for fearing contracting the would suck, but.....

At 11:30 Chicago time, the Minis are up 14 indicating a very mild bounce. That is nothing and not indicative of a “V-bottom” having been formed yet, so my BEST GUESS would be = more volatility this week.

Average year with lots of intermittent volatility
(-3.17% so far)

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Class tonight. Also we will be talking about a lot of things in the UPDATES. I will keep the information at the bottom of said updates.



Up and Running for POT students (so far).

Really quickly...

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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.

Panic has set in as people prepare for the Coronavirus hitting the US.
Not sure what the spoon is for.



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