Tuesday, September 30, 2014

STOCK MARKET BEARISH - -SHORT -- CAUTION

Keybot the Quant remains short as the stock market opens higher, then drops, then recovers now printing the highs of the day, punching up through SPX 1981 and price making a run towards the 1985-1988 resistance. The pre-scheduled number surprisingly drops the algo number four points to +23. Note how utilities are the outperforming sector today. The bulls know they must push UTIL above 566.46 this week to regain their mojo. UTIL is now printing 557. VIX drops to 15.31 so lower volatility sends stocks higher. The bears need lower utes, higher volatility and XLF to move under 23.06 to create a strong leg lower. Bulls will recover and create an extended relief rally if UTIL moves above 566.46 or if VIX drops under 12.45.

9/30/14; 7:00 PM EST EOM =
9/30/14; 10:00 AM EST = +23; signal line is +37
9/29/14; 9:36 AM EST = +27; signal line is +38

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short moving into the Tuesday session. The bears have a strong hold on the markets despite the S&P futures +7 about 3-1/2 hours before the opening bell. Higher utilities and lower volatility will float markets higher. The bears need lower financials, XLF under the 23.05 bull-bear line in the sand, to create more selling pressure. Lower semiconductors, retail stocks and NYA index will also help the bears.

For the SPX starting at 1978, the bulls need to push above 1981, only three points higher, to create an upside acceleration that will attack the strong 1985-1988 overhead resistance area. The +7 in the S&P futures hint that the SPX will immediately attack the 1985-1988 resistance gauntlet after the opening bell. The bears need to push under 1964 to accelerate the downside, a formidable task, so instead bears will concentrate on sending utes and financials lower and keeping volatility elevated. A move through 1965-1980 is sideways action but it looks like the bulls are going to run today. Keybot prints a pre-scheduled number this morning and another this evening for the EOM and EOQ3.

10/3/14; 9:00 AM EST =
9/30/14; 7:00 PM EST EOM EOQ3 =
9/30/14; 10:00 AM EST =
9/29/14; 9:36 AM EST = +27; signal line is +38
9/28/14; 7:00 PM EST = +43; signal line is +38 but algorithm remains short

Monday, September 29, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as equities begin the weak on a sour tone mainly due to the Hong Kong unrest and Brazil tumbling lower. UTIL is well under the 566.46 bull-bear line in the sand that is applicable for the entire week so the bulls have their work cut out for them to bring utes higher. Volatility moves higher creating bear fuel.

Watch the financials; XLF 23.05. XLF is at 23.12 only pennies away and a failure at 23.05 will create significant downside. Markets are recovering as the Fed POMO pump sends stocks higher mid-morning. Bulls will focus on pushing financials and utilities higher while sending volatility lower to try and stop the downside selling.

9/30/14; 10:00 AM EST =
9/29/14; 9:36 AM EST = +27; signal line is +38
9/28/14; 7:00 PM EST = +43; signal line is +38 but algorithm remains short

Sunday, September 28, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is short moving into the new week of trading. The bulls and bears are fighting it out sideways as the algo number is above the signal line wanting to go long but the internal parameters will not yet allow the move. In general, if the SPX moves above 1986 and remains above, Keybot will likely flip long. However, if the algo number slips back under the signal line, which it probably will since UTIL will be under the critical 566.46 number that is important for the entire week, then the bears will remain in control.

Watch UTIL 566.46 and lower which will create market negativity. Watch VIX 12.38. VIX begins the week at 14.85 in the bear camp causing negativity. So utilities and volatility are important to begin the new week. Keybot is also showing interest in financials and tracking XLF 23.03. XLF begins at 23.29 in the bull camp causing market upside. The Hong Kong protests may create negativity in banks overnight.

For the SPX starting at 1983, the bulls need to push above 1986, only three points higher, to accelerate the upside to 1991 and Keybot will likely flip long. The bears need to push under 1966 retracing the Friday move to regain their mojo. This is a formidable task so instead bears will focus on keeping utes weak and volatility high. A move through 1967-1985 is sideways action for Monday. S&P futures are negative on Sunday evening. The bears are driving the bus. Keybot prints three pre-scheduled numbers this week. The EOM is Tuesday. The expectation is for the algo number (+43) to probably drop under the signal line (+38) shortly after trading begins but anything is game in these markets

10/5/14; 7:00 PM EST =
10/3/14; 9:00 AM EST =
9/30/14; 7:00 PM EST EOM =
9/30/14; 10:00 AM EST =
9/28/14; 7:00 PM EST = +43; signal line is +38 but algorithm remains short
9/26/14; 10:00 AM EST = +43; signal line is +38 but algorithm remains short

Saturday, September 27, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short through the weekend. The wild roller coaster ride continues all week long with a big down on Monday and Tuesday, followed by a big up on Wednesday, then a very big down on Thursday and then a very big up on Friday. Semi's and financials recover late in the week, and volatility drops, which helps the bulls recover. As mentioned previously, UTIL 566.46 is an important bull-bear line in the sand for all of next week and at 548 is in bear territory the minute the opening bell rings on Monday morning. The bearish utes will create market negativity.

On the bull side, the algo is champing at the bit to go long but the internal programming rules are not yet satisfied so the model will not latch to allow the move to the bull side. If the SPX moves above 1986, Keybot will likely flip long, however, with the utilities set to turn bearish, the move to the long side will probably be thwarted. Monday morning should be interesting. The parameters and levels of interest for next week can be identified once the Sunday pre-scheduled number prints tomorrow.

9/28/14; 7:00 PM EST =
9/26/14; 10:00 AM EST = +43; signal line is +38 but algorithm remains short

Note: The site continues to receive strong interest and requests by followers concerning providing more details on how the Keybot the Quant algorithm works and if the signal calls can be announced faster. Typically, the flips from the bull to bear side or bear to bull are announced in a timely manner. There are logistics required where anywhere from a few minutes to one-half hour or one hour are needed to post the change in all the areas that need to be updated. If the author is unavailable sometimes the announcement of the flip is delayed a few hours, however, remember that the algo is not a very short term timing model but instead Keybot plots the smoothest course possible for the stock market through the entire year. Thus, the algo can easily miss from zero to 10 even 20 SPX handles sometimes before the turn occurs. That is fine since the algo provides lower risk and safety as well as consistent returns rather than high-risk returns that could go bust at any time. Also, Keybot may flip direction but many times the stock market will reverse only to go against the direction of the algo; this is normal price action. Sometimes if the announcement that Keybot flips sides is delayed, it is to the advantage of anyone following the model since you may enter at a better spot than Keybot entered for the ongoing trade. The algo status is described each day so if you follow the guidelines for that given day you can usually infer that a flip has occurred in the model even if it is not posted to the site for an hour or so. The algo uses a two-tier approach where the algo number and signal line listed above provide the big picture status of markets and the initial signal to flip sides (currently the model is short but wants to go long). The algo has several subroutines constantly running that must latch into place to permit the move (currently the flip to the long side is not permitted by the internal subroutines). These subroutines and methods are proprietary having taken 10 years to properly develop although one key focus you must always maintain is on the prior day and current day's SPX price highs and lows. Happy trading.

Friday, September 26, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short printing one number and the pre-scheduled number to begin the Friday session. The algo wants to flip to the long side but the internal parameters will not latch to allow the move. Equities may stumble sideways today into the weekend to take a rest and assess the path ahead.

Semiconductors recover strongly fed by MU earnings last evening sticking a thumb in the bear's eye with SOX moving higher. Keep watching the XLF 23.03 bull-bear line in the sand. XLF is at 23.19 on the bull side creating market lift. Equities will take a strong leg lower if XLF 23.03 fails. Watch the UTIL 566.46 level as the day draws to a close as described previously. If UTIL finishes under 566 today this will create market weakness come Monday. The UTIL 566.46 bull-bear line in the sand is in play for all of next week. The bulls are currently enjoying a relief bounce after yesterday's drubbing.

9/28/14; 7:00 PM EST =
9/26/14; 10:00 AM EST = +43; signal line is +38 but algorithm remains short
9/26/14; 9:36 AM EST = +42; signal line is +39 but algorithm remains short
9/25/14; 3:59 PM EST = +26; signal line is +39

Thursday, September 25, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short. The algo is very active in the Thursday session printing seven numbers. Semiconductors, financials and utilities are controlling market direction. Watch SOX 635.93 (now at 635.42 causing bearishness), XLF 23.03 (now at 23.07 causing bullishness) and UTIL 566.46. UTIL is at 546 well under the 566.46 which will be in play every day next week but it does not become important until the closing bell Friday at 4 PM. If UTIL finishes under 566, this will create further market negativity come Monday morning. The movement in SOX and XLF at the opening bell in respect to the levels identified by the algo and listed above will dictate market direction for Friday.

For the SPX starting at 1966 closing at the lows, the bears only need to see a smidge of red in the S&P futures overnight and the downside will accelerate further. The bulls will focus on keeping the overnight futures positive and pushing semiconductors and financials higher after the opening bell to stop the market bleeding. A move through 1967-1996 is sideways action to end the week. The bears are driving the bus. Keybot prints a pre-scheduled number tomorrow one-half hour after the opening bell.

9/28/14; 7:00 PM EST =
9/26/14; 10:00 AM EST =
9/25/14; 3:59 PM EST = +26; signal line is +39
9/25/14; 3:41 PM EST = +42; signal line is +40 but algorithm remains short
9/25/14; 3:28 PM EST = +26; signal line is +40
9/25/14; 2:42 PM EST = +42; signal line is +41 but algorithm remains short
9/25/14; 1:47 PM EST = +26; signal line is +41
9/25/14; 1:17 PM EST = +42; signal line is +42 but algorithm remains short
9/25/14; 12:02 PM EST = +26; signal line is +41
9/22/14; 9:36 AM EST = +42; signal line is +42; go short 2004; (Benchmark SPX for 2014 = +8.4%)(Keybot this trade = -0.1%; Keybot for 2014 = +8.0%)(Actual this trade = +0.0%; Actual for 2014 = +9.3%)

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short as the market push and pull continues. The bulls stage a 22-handle intraday turnaround for the SPX yesterday. The algo has not printed any numbers since the flip to the bear side on Monday. The key parameter currently impacting market direction remains volatility. Watch VIX 12.36. The VIX is at 13.27 in bear territory causing market negativity. Bears are fine as long as the VIX does not drop under 12.36. Bulls win the day if volatility drops. If the VIX falls under 12.36 and the SPX is printing above 2000, Keybot will likely flip long. If the stock market rallies but the VIX stays above 12.36, equities will run out of gas and reverse and move lower.

For the SPX starting at 1998, the bulls only need a couple points, to touch the 2000 handle, and bingo, price will immediately tag the 2002-2003 resistance and likely punch up through. The bears need to retrace yesterday's move and push below 1979 to regain their mojo so instead will focus on pushing volatility higher. A move through 1980-1999 is sideways action. The bears are driving the bus but the markets remain in this ongoing choppy sideways bull-bear fight for control.

9/26/14; 10:00 AM EST =
9/22/14; 9:36 AM EST = +42; signal line is +42; go short 2004; (Benchmark SPX for 2014 = +8.4%)(Keybot this trade = -0.1%; Keybot for 2014 = +8.0%)(Actual this trade = +0.0%; Actual for 2014 = +9.3%)

Wednesday, September 24, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short and the algo motors along without printing any numbers since the model flipped short on Monday. The algo number and signal line are both at +42 indicating the ongoing bull-bear fight for control. The bulls need lower volatility to stop the market selling. The bears need lower semi's and/or utilities to create more selling. The bulls need VIX under 12.39. The bears need either UTIL under 542.42 and/or SOX under 636.20. If the three parameters remain status quo, in their respective bear and bull camps, then equities float along sideways.

For the SPX starting at 1983, closing at the lows, the bears only need a smidge of negativity in the futures and price will seek the low to mid 1970's quickly. S&P futures point to a flat to higher start about four hours before the opening bell. The bulls need to push the SPX above 1995 to signal the all-clear for upside again. A move through 1984-1994 is sideways action. Keep a close eye on semiconductors.

9/26/14; 10:00 AM EST =
9/22/14; 9:36 AM EST = +42; signal line is +42; go short 2004; (Benchmark SPX for 2014 = +8.4%)(Keybot this trade = -0.1%; Keybot for 2014 = +8.0%)(Actual this trade = +0.0%; Actual for 2014 = +9.3%)

Tuesday, September 23, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side and volatility will continue playing the key role in market direction. Watch VIX 12.38. Bears win with VIX above 12.38. Bulls win below. The algo begins tracking semiconductors identifying SOX 636.00 as a bull-bear line in the sand. SOX is 641.35 comfortably in bull territory causing stock market lift. Bears can create strong downside if semiconductors fail.

For the SPX starting at 1994, the bears need three points, to push under 1991 and the downside will accelerate to 1888 quickly and then test 1985-1986 support. The bulls need to retrace yesterday's loss, a formidable task, so instead will concentrate on dragging volatility lower and pushing semi's higher to try and stop or stall the market selling. A move through 1992-2008 is sideways action. The bears are driving the bus. Note: The pre-scheduled number listed previously for today is actually for next Tuesday so this Friday morning is the only pre-scheduled number that will print this week.

9/28/14; 7:00 PM EST =
9/26/14; 10:00 AM EST =
9/22/14; 9:36 AM EST = +42; signal line is +42; go short 2004; (Benchmark SPX for 2014 = +8.4%)(Keybot this trade = -0.1%; Keybot for 2014 = +8.0%)(Actual this trade = +0.0%; Actual for 2014 = +9.3%)