Monday, July 21, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the new week of trading is underway and the algo begins in a very active mode printing three numbers out of the gate. The bears are using the higher volatility to create market weakness. Copper is trading higher helping the bulls. The VIX bull-bear line in the sand is at 12.95 so equities will remain and finish weak today as long as the VIX stays above 12.95. Bulls will recover and send markets higher if they push VIX under 12.95. The imminent turn status will quickly return if the VIX loses 12.95. For now, the bears are driving the bus without any fight from the bulls.

7/27/14; 7:00 PM EST =
7/21/14; 10:17 AM EST = +52; signal line is +64
7/21/14; 9:55 AM EST = +66; signal line is +64 but algorithm remains short
7/21/14; 9:44 AM EST = +52; signal line is +63
7/20/14; 7:00 PM EST = +66; signal line is +63 but algorithm remains short

Sunday, July 20, 2014

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

Keybot the Quant is bearish moving into the new week of trading but the algorithm wants to flip to the long side. Internal programming rules, however, will not yet permit to the move to the short side. If the SPX moves above 1980, only a couple points higher, Keybot will likely flip long. Hence, the imminent turn notation is in the title line. If equities gap-up at Monday's opening bell, Keybot will likely not flip long right away. A gap-up timer may trigger that will prevent the move for about 90 minutes. S&P futures are lower by one point as the week begins.

The algo is tracking copper and volatility as the two key drivers of market direction to begin the week. Watch JJC 38.61 and VIX 13.06. Both are causing market bullishness with JJC at 38.95 and VIX at 12.06 (volatility moves inversely to the stock market). Equities will continue floating higher unless the market bears can pull one of these two parameters into the bear camp which will create immediate selling pressure. JJC is 34 cents from the bull-bear failure line which would be about a -0.9% drop. Thus, watch copper trading overnight. Any copper negativity is a plus for market bears and a drop in copper of -0.8% to -1.0% is a signal that the stock market is about to begin dropping in force. If copper is positive overnight moving higher the bulls are going to win the day on Monday and create new all-time highs in the SPX.

For the SPX starting at 1978, the bulls need to touch the 1980 handle and a big upside acceleration party occurs with bulls dancing in the streets and Keybot likely flipping long. The bears need to push under 1961 to accelerate the downside. A move through 1962-1979 is sideways action to begin the week. Very simply, bulls win with SPX 1980 and bears win with JJC 38.61 (copper dropping about -0.9% or more). Copper is trading about -0.2% lower as a new week of trading begins. 

7/27/14; 7:00 PM EST =
7/20/14; 7:00 PM EST = +66; signal line is +63 but algorithm remains short
7/18/14; 10:58 AM EST = +66; signal line is +63 but algorithm remains short

Saturday, July 19, 2014

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

Keybot the Quant remains short through the weekend which has not occurred since May. Despite the big upside bull rally recovery, the algo idles along remaining bearish. If the SPX would have gained a couple more points, Keybot would probably be long now. Monday's opening will be very important.

The wild spike higher in volatility on Thursday afternoon (VIX above the algo's 13.06 bull-bear level) created the flush lower in equities then the collapse in volatility under VIX 13.06 on Friday catapulted the stock market bulls to greatness again. The VIX giveth to bears and taketh away.

The algo identifies copper and volatility as the current market direction drivers to begin next week. Watch for any copper weakness which currently appears to be the best chance for the market bears to create selling pressure. A drop in copper of only about -0.8% should be enough to lock in stock market downside. So if you see copper trading negatively overnight into Monday the bears are coming to play and are at least going to make upside gains difficult. If copper is trading positively, the bears got nothing and will likely fold like a cheap suit with Keybot likely flipping to the long side.

Key levels and other algo information can be identified once the Sunday pre-scheduled number prints. The bears are driving the bus but the bulls have their hands on the steering wheel as well. Keybot is champing at the bit to go long but the internal programming rules will not yet permit the move.

7/20/14; 7:00 PM EST =
7/18/14; 10:58 AM EST = +66; signal line is +63 but algorithm remains short

Friday, July 18, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the bulls mount a strong recovery after VIX colapses through 13.06 like a hot knife through butter. Bears need VIX back above 13.06 as soon as possible. In the mean time, the algo number is back above the signal line and Keybot is champing at the bit to whipsaw back to the long side. If the SPX moves above 1982.63 (say 1982 in general by the looks of it) into today's closing bell, Keybot will likely flip back to the long side. The bears need to prevent anymore upside in the SPX. VIX is printing down at 12.35 with about two hours of trading remaining in the day and week. If VIX moves higher, SPX drops. If VIX drops, SPX moves higher. The SPX is printing 1975. Do the bulls have another 7 points of upside in them moving into the weekend?

The algo is now tracking copper more closely again. Watch JJC 38.60. JJC is at 38.93 creating bullishness in markets. Bears need JJC under 38.60. The retail sector runs higher today creating bull fuel. RTH is up near 60 firmly in the bull camp

7/20/14; 7:00 PM EST =
7/18/14; 10:58 AM EST = +66; signal line is +63 but algorithm remains short
7/18/14; 10:00 AM EST = +52; signal line is +63

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is bearish as the Friday session motors along. The RTH pivots higher from 59.46 so the bulls receive the nod today and equities launch higher. VIX dropped under the critical 13.06 bull-bear level adding further bull fuel, but recovered back above placing a ceiling on the market upside.

Therefore, the bulls and bears are fighting it out currently with the bulls waving the RTH 59.46 banner and the bulls waving the VIX 13.06 banner. One of these will flinch. Either the bulls win with VIX dropping under 13.06 which will send stocks strongly higher, or, the bears win with RTH falling back under 59.46 reigniting the downside market selling. Keybot prints one number after the opening bell and also the pre-scheduled number so far today. RTH 59.46 and VIX 13.06 tell you the market direction answer today. The bears are driving the bus. Bulls will not make headway higher without VIX under 13.06.

7/20/14; 7:00 PM EST =
7/18/14; 10:00 AM EST = +52; signal line is +63
7/18/14; 9:39 AM EST = +53; signal line is +63
7/17/14; 3:42 PM EST = +37; signal line is +63

Thursday, July 17, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 1963 this afternoon. The algo has been fixated on retail, financials and volatility and volatility, the VIX moving above 13.10 created the deterioration in equities, then RTH under 59.46 created more selling. The RTH closed exactly on Keybot's 59.46 bull-bear line in the sand. It is amazing how the algo can identify these key levels before they occur. RTH 59.46 will tell the story at the opening bell tomorrow; if RTH moves higher so do stocks; if RTH moves lower so do stocks.

The bulls can stop the selling with RTH above 59.46 and/or VIX below 13.10.  The bears can create further market deterioration with RTH under 59.46 and/or the XLF under 22.50. So the RTH pivot tells you who  wins tomorrow at the opening bell, then, if the bulls are recovering, VIX 13.10 determines how much. If the bears win with a lower RTH, then XLF 22.50 will determine if markets flush lower, or not. If RTH stays at 59.46 or lower (causing bearishness), and VIX above 13.10 (causing bearishness), and XLF above 22.50 (creating bullishness), like now, the markets will stagger sideways into the weekend.

The Keybot algorithm program gains about +4% on the last trade which ran for 8 weeks. The actual trading gains over +8%. Keybot exited the SSO trade and entered SDS for the short side move. The Keybot the Quant algorithm has provided an actual return this year thus far of +8% (+7.9%).

For the SPX for Friday starting at 1958, the bulls need to recover today's down draft to regain their mojo which is a formidable task so instead the bulls will force retail stocks higher and push RTH higher with all their might to stop the market selling. The bears only need to push the SPX under 1956, a couple points lower, to accelerate the downside to 1950. A move through 1957-1980 is sideways action to end the week. The bears finally took control of the steering wheel today as geopolitical events create fear spiking volatility wildly higher and sending equities lower. As always, stay alert for a whipsaw move. RTH 59.46 tells you the answer at the opening bell. Listen for any news concerning retail stocks. Keybot prints a pre-scheduled number tomorrow morning after trading begins.

7/20/14; 7:00 PM EST =
7/18/14; 10:00 AM EST =
7/17/14; 3:42 PM EST = +37; signal line is +63
7/17/14; 3:20 PM EST = +53; signal line is +64; go short 1963; (Benchmark SPX for 2014 = +6.2%)(Keybot this trade = +3.9%; Keybot for 2014 = +6.3%)(Actual this trade = +8.2%; Actual for 2014 = +7.9%)
7/17/14; 2:53 PM EST = +53; signal line is +64 but algorithm remains long
7/17/14; 9:00 AM EST = +67; signal line is +64
7/13/14; 7:00 PM EST = +67; signal line is +64
7/7/14; 10:53 AM EST = +67; signal line is +63
7/6/14; 7:00 PM EST = +81; signal line is +63
7/3/14; 9:00 AM EST = +81; signal line is +63
6/30/14; 7:00 PM EST EOM = +81; signal line is +63
6/29/14; 7:00 PM EST = +81; signal line is +63
6/27/14; 10:00 AM EST = +81; signal line is +62
6/24/14; 10:00 AM EST = +80; signal line is +62
6/22/14; 7:00 PM EST = +79; signal line is +62
6/20/14; 9:36 AM EST = +79; signal line is +62
6/17/14; 9:00 AM EST = +63; signal line is +61
6/16/14; 3:03 PM EST = +63; signal line is +61
6/16/14; 11:35 AM EST = +47; signal line is +60 but algorithm remains long
6/16/14; 9:44 AM EST = +63; signal line is +61
6/15/14; 7:00 PM EST = +47; signal line is +61 but algorithm remains long
6/13/14; 12:27 PM EST = +47; signal line is +60 but algorithm remains long
6/13/14; 10:42 AM EST = +63; signal line is +60
6/13/14; 10:00 AM EST = +47; signal line is +60 but algorithm remains long
6/13/14; 9:36 AM EST = +47; signal line is +60 but algorithm remains long
6/12/14; 3:53 PM EST = +63; signal line is +60
6/12/14; 3:29 PM EST = +47; signal line is +60 but algorithm remains long
6/8/14; 7:00 PM EST = +63; signal line is +60
6/6/14; 9:00 AM EST = +63; signal line is +59
6/5/14; 1:31 PM EST = +63; signal line is +58
6/5/14; 12:47 PM EST = +47; signal line is +57 but algorithm remains long
6/5/14; 12:25 PM EST = +63; signal line is +57
6/5/14; 12:07 PM EST = +47; signal line is +57 but algorithm remains long
6/5/14; 11:15 AM EST = +63; signal line is +57
6/5/14; 9:36 AM EST = +47; signal line is +58 but algorithm remains long
6/4/14; 9:36 AM EST = +63; signal line is +59
6/1/14; 7:00 PM EST EOM = +79; signal line is +59
5/30/14; 10:00 AM EST = +79; signal line is +59
5/29/14; 10:30 AM EST = +80; signal line is +58
5/27/14; 10:52 AM EST = +64; signal line is +57
5/27/14; 10:00 AM EST = +80; signal line is +57
5/27/14; 9:36 AM EST = +80; signal line is +56
5/25/14; 7:00 PM EST = +64; signal line is +56
5/22/14; 9:44 AM EST = +64; signal line is +55; go long 1889; (Benchmark SPX for 2014 = +2.2%)(Keybot this trade = -0.5%; Keybot for 2014 = +2.4%)(Actual this trade = -1.1%; Actual for 2014 = -0.3%)

Wednesday, July 16, 2014

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long. The beat goes on with the bulls slapping the bears around day after day. The algo is tracking RTH 59.47 and JJC 38.65. Both are now printing above these critical bull-bear levels, identified by the algo, creating market bullishness, and equities keep floating higher. Equities should be limited on the upside due to the failure in commodities over the last three weeks. The bears need either RTH 59.47 or JJC 38.65 or they got nothing. Markets will begin selling off and start a trend lower if one of these two parameters turn bearish. If one of the two turn bearish, and the SPX drops under 1976, Keybot will likely flip short.

For the SPX starting at 1982, the bulls need to touch the 1984 handle and an upside acceleration will occur in a heartbeat with price punching up through the all-time high at 1985 and moving to 1990. So watch the S&P futures to see if the bulls can muster up a couple of points and put on the party hats for Thursday. The bears need to push under 1976 to accelerate the downside. A move through 1977-1983 is sideways action. The bears need weaker retail stocks and weaker copper or they got nothing. Housing Starts hit at 8:30 AM and will impact the S&P futures. Keybot prints a pre-scheduled number before the opening bell.

7/18/14; 10:00 AM EST =
7/17/14; 9:00 AM EST =
7/13/14; 7:00 PM EST = +67; signal line is +64

Tuesday, July 15, 2014

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long and another day goes by with the algo not printing any numbers. The JPM and GS positive earnings catapult the XLF to 23. Retail Sales numbers were good enough to send RTH to 60. Note how commodities are continuing to collapse which will limit the broad market upside. Bears need RTH 59.43 or VIX 13.03 to create market weakness. If either parameter turns bearish, and the SPX drops under 1965.50, Keybot will likely flip short.

For the SPX starting at 1973, the bulls need to push above 1982 to create an upside acceleration. The bears need to push under 1965.50 to accelerate the downside. A move through 1966-1981 is sideways action. The bulls are cruising.

7/17/14; 9:00 AM EST =
7/13/14; 7:00 PM EST = +67; signal line is +64

Monday, July 14, 2014

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains bullish as the new week begins and the algo does not print any numbers during the Monday session. Keybot is simply motoring along on the long side. Bears need either RTH 59.43, VIX 13.03 and/or XLF 22.48 or they got nothing. The C earnings this morning set a positive tone for banks and slapped the bears in the face from the get-go. The market upside is likely limited, however, since commodities remain weak. If one of the three parameters turn bearish, and the SPX drops under 1970, Keybot will likely flip short. Since the bulls are remaining a safe distance from the three parameters creating market buoyancy the imminent turn notation is removed, for now.

For the SPX starting at 1977, the bulls need to touch the 1980 handle and an upside acceleration will quickly occur taking price to the all-time highs in the mid to high 1980's. The bears need to push under 1970 to accelerate the downside. A move through 1971-1979 is sideways action for Tuesday. The bulls are cruising. The bears got nothing until either the retail or financial sectors weaken or volatility moves higher. Interestingly, Retail Sales data hits at 8:30 AM EST and will greatly impact RTH.

7/18/14; 10:00 AM EST =
7/17/14; 9:00 AM EST =
7/13/14; 7:00 PM EST = +67; signal line is +64

Sunday, July 13, 2014

STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains long as the new week of trading begins. The same-o theme remains with financials, volatility and retail the three areas most greatly controlling broad market direction currently. Watch XLF 22.46, VIX 13.16 and RTH 59.34. All three are in the bull camp creating market upside. Bears got nothing unless they pull at least one of the three into the bear camp. If all three remains bullish, the stock markets will float sideways with an upward bias. If one of the three parameters turn bearish, and the SPX drops under 1960, Keybot will likely flip to the short side, hence, the imminent turn notation remains in the title line.

For the SPX starting at 1968, the bulls need to touch the 1969 handle, only one skinny point higher, and an upside acceleration will occur. S&P futures are +1 on Sunday evening so the bulls want to make a run, however, the opening bell is a long way away. The bears need to push under 1960 on Monday to accelerate the downside. A move through 1961-1968 is sideways action to begin the week. The algo prints two pre-scheduled numbers this week one on Thursday and the other on Friday. The bulls are driving the bus for almost two months. XLF 22.46 is likely the best opportunity for the bears to take control of the stock market. Listen for any negative news concerning banks or retailers.

7/20/14; 7:00 PM EST =
7/18/14; 10:00 AM EST =
7/17/14; 9:00 AM EST =
7/13/14; 7:00 PM EST = +67; signal line is +64
7/7/14; 10:53 AM EST = +67; signal line is +63