Sunday, January 25, 2015

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

Keybot the Quant begins the new week of trading on the long side but the algorithm wants to flip to the short side. If the SPX drops under 2051, and remains under, Keybot will likely flip short so watch to see if any weakness appears in overnight futures. If a gap down occurs, about 90 minutes of trading may be required before the algo will commit.There is only one point difference between the algo number and signal line and the model wants to flip short as soon as all the necessary parameters latch; the SPX under 2051 is key.

The algo is tracking NYA 10805, VIX 15.85 and SOX 672.43. The bulls need either NYA above 10805 or VIX under 15.85 and it is all systems go for the upside rally in stocks. Either one would do and both will double the upside fuel. The bears need to push SOX (semiconductors) under 672.43 to create further downside selling pressure. If status quo remains, SOX bullish above 672.43 and NYA bearish under 10805 and VIX bearish above 15.85, then markets will float along sideways with a slight upward bias. One of those three parameters will flinch and expose the market direction ahead. Watch the NYA 10805 level closely.

For the SPX starting at 2052, the bears only need a point and one-half, to push under 2050.50 and the downside will accelerate. The bulls need to touch the 2063 handle to create an upside acceleration. A move through 2051-2062 is sideways action for Monday. Keybot prints two pre-scheduled numbers this week one on Tuesday morning and one on Friday morning. Friday is the last day of trading for January; EOM (end-of-month). The month and year started at SPX 2059.

2/1/15; 7:00 PM EST EOM =
1/30/15; 10:00 AM EST =
1/27/15; 10:00 AM EST =
1/25/15; 7:00 PM EST = +22; signal line is +23 but algorithm remains long
1/23/15; 3:42 PM EST = +22; signal line is +24 but algorithm remains long

Friday, January 23, 2015

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

Keybot the Quant remains long through the weekend but is already champing at the bit to reverse to the short side again. The aglo number drops under the signal line late day to flip Keybot short but internal programming rules would not fully latch so the algo remains long. Monday morning should be interesting. The NYA fell through 10805 late day causing the market weakness. Bears are celebrating this failure which is a key market signal (NYA 40-week MA cross).

Also of interest is the VIX that came down to the 15.85 that Keybot identified ahead of time and bounced. This was the bull's chance to catapult stocks wildly higher but instead the VIX would not fail at 15.85 and started to climb again which flushed the stock market lower into the closing bell (VIX moves inverse to he SPX). The market momentum swung back in the bear's favor after the VIX would not fail and then accelerated more negative with the NYA failure.

1/25/15; 7:00 PM EST =
1/23/15; 3:42 PM EST = +22; signal line is +24 but algorithm remains long
1/22/15; 2:32 PM EST = +36; signal line is +25; go long 2054; (Benchmark SPX for 2014 = -0.2%)(Keybot algo this trade = -0.8%; Keybot algo for 2014 = -3.0%)(Actual results this trade = -0.8%; Actual results for 2014 = -5.8%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long after the wild upside day yesterday. Bulls need XLF above 24.11 or VIX under 15.85 for more juice. Bears need NYA under 10805 or they got nothing.

For the SPX starting at 2063, the bulls need only two points, to touch the 2065 handle and an upside acceleration will continue. The bears are focused on keeping XLF and VIX in the bear camp while pushing NYA lower. The SPX began January and the year at 2059.

1/25/15; 7:00 PM EST =
1/22/15; 2:32 PM EST = +36; signal line is +25; go long 2054; (Benchmark SPX for 2014 = -0.2%)(Keybot algo this trade = -0.8%; Keybot algo for 2014 = -3.0%)(Actual results this trade = -0.8%; Actual results for 2014 = -5.8%)

Thursday, January 22, 2015

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips into the bull camp this afternoon at 2:32 PM EST at SPX 2054. The NYA Index launches up through 10805 providing bull fuel; this number remains important. Watch VIX 15.85 and XLF 24.11; volatility and financials, respectively. Bulls will receive more fuel if XLF rises above 24.11 and/or VIX drops below 15.85. If neither occurs then you will know that the market upside will stall. If either one joins the bull camp, the upside party will strengthen. Bears need NYA under 10805 or they got nothing.

The algo takes another loss on the year due to the sideways choppy markets with both the algo program and the actual trading losing -0.8%. The SPX benchmark remains negative on the year. The SPX started the year at 2059. Keybot exited DXD and entered DDM. Even though a double ETF was employed on the last trade, the loss was not large since the Dow Industrials are moving in a tighter pattern than the other major indexes. As always stay alert for a whipsaw. The markets remain extremely erratic and unstable.

XLF is at 24.04 only seven pennies from the bull-bear line in the sand at 24.11. You can use this as a market proxy. From here, stocks will move with the XLF. Bears need to push XLF under 24 and lower to stop the huge upside market rally today.

1/25/15; 7:00 PM EST =
1/22/15; 2:32 PM EST = +36; signal line is +25; go long 2054; (Benchmark SPX for 2014 = -0.2%)(Keybot algo this trade = -0.8%; Keybot algo for 2014 = -3.0%)(Actual results this trade = -0.8%; Actual results for 2014 = -5.8%)
1/22/15; 2:20 PM EST = +36 signal line is +24 but algorithm remains short
1/22/15; 10:43 AM EST = +22 signal line is +23
1/22/15; 9:42 AM EST = +6 signal line is +23
1/21/15; 10:19 AM EST = +22 signal line is +25
1/21/15; 9:00 AM EST = +6; signal line is +26
1/20/15; 3:37 PM EST = +6; signal line is +27
1/20/15; 3:10 PM EST = +22; signal line is +28
1/18/15; 7:00 PM EST = +6; signal line is +29
1/16/15; 10:00 AM EST = +6; signal line is +31
1/13/15; 1:25 PM EST = +3; signal line is +33
1/13/15; 9:36 AM EST = +19; signal line is +35
1/12/15; 12:54 PM EST = +3; signal line is +36
1/12/15; 10:51 AM EST = +19; signal line is +38
1/12/15; 9:46 AM EST = +3; signal line is +39
1/12/15; 9:36 AM EST = +19; signal line is +41; go short 2038; (Benchmark SPX for 2014 = -1.0%)(Keybot algo this trade = -1.0%; Keybot algo for 2014 = -2.2%)(Actual results this trade = -2.0%; Actual results for 2014 = -5.0%)

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

Keybot the Quant remains short as the markets deal with the ECB QE announcement and aftermath. The SOX fell under the critical 672.32 bull-bear line in the sand so it looked good for bears but the SOX recovered and is now above creating market lift. As stocks ran higher, the bulls tried to push the NYA above 10805 but the NYA hit its head on the ceiling and staggered lower now at 10777 unable to yet confirm sustainable upside. Isn't it amazing how Keybot can identify the key number before it occurs? Thus, SOX remains above 672.32 and NYA remains under 10805 so stocks stumble sideways with an upward bias.

Bull will be victorious with NYA above 10805 and Keybot will likely flip long. Bears will be victorious with SOX under 672.32, now at 674.31. If status quo remains, markets stagger sideways with the slight upward bias. One of those two parameters will flinch and that will confirm the directional path ahead.

1/25/15; 7:00 PM EST =
1/22/15; 10:43 AM EST = +22 signal line is +23
1/22/15; 9:42 AM EST = +6 signal line is +23
1/21/15; 10:19 AM EST = +22 signal line is +25

Wednesday, January 21, 2015

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short but the bulls keep battling. Stocks sold off in the afternoon but you knew the bears had nothing since the SOX would not drop under 672.36. The algo is tracking semiconductors and the NYA Index. If the NYA moves above 10805, Keybot will likely flip long. If the SOX drops under 672.36, the bears are going to start selling the market hard. If the SOX remains above 672.36 and the NYA under 10800, stocks will trade sideways choppy with  a slight upward bias.

For the SPX for Thursday starting at 2032, the bulls need to push above 2038 and boom, the upside will accelerate to 2046. The bears need to push under 2012 to accelerate the downside to 2002-2003. A move through 2013-2031 is sideways action. ECB President Draghi will explain the new QE program tomorrow at the press conference at 8:30 AM EST (one hour before the opening bell) so monitor the S&P futures at that time to note the market reaction.

1/25/15; 7:00 PM EST =
1/21/15; 10:19 AM EST = +22 signal line is +25

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the bulls launch an upside rally using the semiconductors as fuel. SOX 672.36 is an important level and price has blown up through to 679. If the NYA moves above 10805, Keybot will likely flip long. NYA is at 10724 and climbing. Note that the algo number is now only three ticks from the signal line. The caution flag is out as the bulls are trying to retake control. So bulls win big if NYA moves above 10800. Bears win big if SOX drops under 672.36. Status quo sends the stock market choppy sideways. The much-awaited ECB decision is on tap tomorrow morning.

1/25/15; 7:00 PM EST =
1/21/15; 10:19 AM EST = +22 signal line is +25
1/21/15; 9:00 AM EST = +6; signal line is +26
1/20/15; 3:37 PM EST = +6; signal line is +27

Tuesday, January 20, 2015

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short moving into Wednesday trading. The bulls and bears are fighting over semiconductors so pay close attention to the SOX 672.38 bull-bear line in the sand. The stock market will catch a bid with the SPX moving up into the 2030's if SOX moves above 672.38. Bears must prevent SOX 672.38. The SOX begins at 670.57 in the bear camp creating market negativity but is less than two points away from the 672.38.

If SOX turns bullish and markets move higher, bulls will likely still need either XLF 24.10 or NYA 10800 to regain full control of the markets but the banks are in a sour mood. Thus, the best bet for the bulls is SOX 672.38 followed by NYA 10800 and the bulls will be sending the stock market far higher and Keybot will likely flip long. These levels will roughly hold in place through the ECB decision on Thursday.

For the SPX starting at 2023, the bulls need to touch the 2029 handle and bingo, an upside acceleration into the 2030's will quickly occur. The bears need to push under 2005 to accelerate the downside. A move through 2006-2028 is sideways action for Wednesday.

1/25/15; 7:00 PM EST =
1/21/15; 9:00 AM EST =
1/20/15; 3:37 PM EST = +6; signal line is +27
1/20/15; 3:10 PM EST = +22; signal line is +28
1/18/15; 7:00 PM EST = +6; signal line is +29

Sunday, January 18, 2015

STOCK MARKET BEARISH -- SHORT

Keybot the Quant is on the short side as a new week of trading will begin on Tuesday morning. The bulls need either SOX 673.50 or NYA 10800 to confirm a strong move higher for stocks. The bears have to keep the semiconductors and NYA Index in their camp under the levels shown.

For the SPX starting at 2019, the bulls only need a point, to move above 2020, and boom, the upside will accelerate a few more handles to the middle 2020's. The bears need to push under 1988 to get their mojo back, a formidable task so instead bears will focus on preventing SOX 673.50 and NYA 10800 from occurring.  A move through SPX 1989-2019 is sideways action for Tuesday. Keybot prints one pre-scheduled number this week on Wednesday morning.

1/25/15; 7:00 PM EST =
1/21/15; 9:00 AM EST =
1/18/15; 7:00 PM EST = +6; signal line is +29
1/16/15; 10:00 AM EST = +6; signal line is +31

Saturday, January 17, 2015

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short through the 3-day holiday weekend. US trading does not resume until Tuesday morning. The algo is idling along during the back half of last week only printing the pre-scheduled number on Friday. The bulls run stocks higher into Friday's closing bell. The NYA Index and semiconductors will be important next week. The areas and levels of interest can be identified once the Sunday pre-scheduled number prints.

1/18/15; 7:00 PM EST =
1/16/15; 10:00 AM EST = +6; signal line is +31