STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips long today after the opening bell. The gap-up opening was not large enough to trigger a timer so the highs above SPX 1977 latch-in, along with all other parameters, and Keybot flips to the bull side at SPX 1982. The short side was only a 3-day event and the bears could not develop any significant downside juice. The bearish move was basically a volatility event due to geopolitical factors. The bears need to place meat on the bones with a sector such as financials, retail or copper creating the weakness but all they could hang their hats on was volatility.

The VIX dropping under 13 yesterday was a tell that the bulls were staging a comeback. VIX dropping under 12 today places the bulls in the upside party mode. All this said, it would not be surprising to see a whipsaw occur today or tomorrow and for the bears to quickly fight back. There is only one tiny point between the algo number and signal line so the bulls do not exactly have a ringing endorsement of upside.

Bears need VIX above 12.96 or they got nothing. The SPX prints new all-time intraday record highs. The algo program logs a -1% loss on the last trade and the actual trading using the SDS double inverse loses almost -2%. Keybot cycled out of SDS and entered SSO. Watch for a potential whipsaw but the bears will need higher volatility to make it happen. VIX is currently printing 11.95 one-point under the 12.96 danger line. The broad indexes are very erratic and unstable currently. 

7/27/14; 7:00 PM EST =

7/22/14; 9:35 AM EST = +66; signal line is +65; go long 1982; (Benchmark SPX for 2014 = +7.3%)(Keybot this trade = -1.0%; Keybot for 2014 = +5.3%)(Actual this trade = -1.9%; Actual for 2014 = +6.0%)

7/21/14; 1:12 PM EST = +66; signal line is +64 but algorithm remains short

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

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

7/18/14; 9:39 AM EST = +53; signal line is +63

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%)