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

Thursday | June 11, 2020

Hello Eizell.




The day was a typical Federal Reserve Day.

The market seems to like the MIGHTY OZ behind the curtain, and not out for display.

The $3 Trillion Dollar Man, federal reserve chair Jerome Powell, couldn't get any love regardless of how much candy he hands out to the kids.

The Fed Chair promised another $120 billion in cash; to keep rates at 0 until 2022, and offered apologies to everyone in every racial group.


Another $120 billion was not enough to satisfy America's now diabetic sweet-tooth for easy money. A measly $120 billion at this point is the Brach's jelly nougat of Halloween. On the close, disgruntled trick-or-treaters egged and TP'd the stock market's house.

The Dow closed down 282 and SPX closed down 17.04. I suspect today will be worse.


TODAY: June 11

TODAY – The ole “flaming bag of dog poop” trick
LONG TERM – NEW ALL TIME HIGHS (possibly), and then a NASTY trade war sell-off


Yesterday, the markets signaled their unhappiness with fed chair Powell's remarks, and his vision of the economy. This poor guy has been the Rodney Dangerfield of fed chairs, never getting any respect.

Yesterday on the close, traders metaphorically egged his house/remarks. I suspect traders will bring friends back faster than Antifa and do the “flaming bag of dog poop” Halloween trick on the market today. A little toilet paper hanging from the trees is not enough for the mini zagnut bar the chair dropped in everyone's bag yesterday.

I have no idea why he doesn't learn from Greenspan and get himself a $60 pound worn out briefcase and speak in circles to the point no one knows what he is saying. It worked from Alan Greenspan for 19 years.

We have had a HUGE run higher, and no one knew where it would stop. Apparently, it stopped at SPX unchanged for the year. We could see 1,000 Dow points gone fast.

Of course, people will freak out with panic in their voices on TV. Forget that we had a 900-point move higher last Friday (6 days ago). Time for fun!

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 -35% for the year.

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.

Average year with lots of intermittent volatility
(-1.26% so far)

POT Logo

It was an important class.

Example 129

We started with a recap of the EXAMPLE 129 where we reversed the ARR into a neutral position – just in time as it turns out.



We then went on to talk about the manner in which one can get delta neutral without losing money on unknown variables. Many people think just being “delta neutral” means they can not lose money – until they do. Only after losing thousands of dollars do they realize they had gamma, vega or theta exposure that was more powerful than the delta risk they eliminated.



Up and Running for POT students (so far).

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You provide the coffee and we will take care of the rest.



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