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

Thursday | March 19, 2020

Hello Friend.

YESTERDAY'S CLOSING PRICES

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YESTERDAY: March 19

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Fear is a liar, but it does wreck markets. What does the market fear? Only the unknown. As long as it knows the struggles ahead (bad earnings, recession, etc. ), it holds up pretty well.

YESTERDAY

The markets took another huge dump of >10% for the day. The day was characterized as massive selling of all assets except the US dollar. Typically, in fearful situations when the market falls, the bonds and gold jump. Even Bitcoin is often acting like a hedge to scary times, but yesterday the floodgates were all open.

President Trump had what is becoming one of his now daily press conferences with his “Corona Squad”. This disappointed the markets which sold off an addition 800 points during his speech. The day prior, he was talking about giving everyone in the country $1,000, dumping huge money on the travel industry, etc. During the press conference, he was asked about this $1,000, and he walked back a little saying “it is being discussed”.

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The market hate uncertainty. Right now, the markets want a definitive plan and no vacillation. Never walk back on anything right now. The President has a lot to combat with mayors, congressman, and governors screaming “remain calm” with a look of terror on their face and a N95 mask in their hands.

This percolating fear and uncertainty sent the Dow below 20,000 without hesitation. We coasted through support levels as if they didn't exist. It smelled like a fire sale of assets. If people are going to be stuck in their homes for 3 weeks, they apparently have to liquidate their 400,000 retirement account for emergency needs.

CLOSE

Near the close, the market ran up 1000 Dow points and 100 SPX points on reports that Congress was going to pass the Emergency Aid package to assist companies and individuals. Once again, we have no idea what all those tens hundred of billions are allocated for, but I am sure the politicians can come up with something.

OIL fell to $20 on fear of a slowing economy and the Russia / Saudi Arabia price war. Keep in mind that oil was $54 just 18 days ago.

TLT / BONDS-The TLT fell almost $11 points on Tuesday and another -8.63 yesterday. It closed at 144.35. This is an insane move given we do not see 11 point moves in some years.

GOLD was over 1700 last month, and closed at 1,471. Again, this was a huge move.

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TODAY: March 19

LEMMINGS AGAIN

More fears and uncertainty doesn't bode well. I keep thinking “one day this market is going up 3000 points on some news”, but it is not happening yet. We have not had the ray of hope yet, and some of the false and apocalyptic reports from the media are not helping. They should lose their FCC license.

Would Tom Hanks, the most trusted man in America, please get on TV for a public announcement? Instead of pitching movies, the nation needs him to calmly talk about his experience with the virus. You don't bleed from the eyes.

This virus is like the H1N1 virus we had a few years ago. Very similar, but the media didn't care. This virus doubles every 4 days, meaning Monday we will see twice as many people sick and dead as today. That is how viruses work. If I even look at my grandkids from 20 feet away, I will have a cold 3 days later.

If you think people are losing their minds with 9600 sick in the US today, wait until it is 19,000 on Monday. The H1N1 killed 500,000 in 2009, and the coronavirus is projected to kill about the same amount. I don't know of any preventive measures taken back then, and don't know of anyone who died. I certainly don't remember the need for 20 bottles of Purell and 100 rolls of TP.

Yes, this is serious. I am not minimizing it. I am GUESSING we will find that a malaria drug like chloroquine will solve most of the problems, and people look back and feel foolish for worrying so much. The next thought is “what am I going to do with 100 cans of baked beans?”

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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 intermittent volatility
(-25.77% so far)

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Class was re-scheduled to tonight because of an abundance of important questions. Times are nerve-racking, but this will end one day.

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