Keybot the Quant is short going into the new week of trading. The bears are in control of stock market direction with the algo number 6 points below the signal line but that is nothing to write home about.
Bears need weaker chips to prove that they got game to the downside. If not, all it is, is talk. Bears need SOX below 5119. If that happens the stock market should fall apart going forward.
Bulls need to stop the selling with lower volatility and higher utilities. These two are strange bedfellows but hey, maybe they were looking for something strange. Bulls need VIX below the 16.61 palindrome pronto. A lower VIX will immediately stop the selling in the stock market. If VIX turns bullish and the SPX catapults higher on some kind of good news, Keybot the Quant may flip back to the long side above SPX 6115. It is a long-shot but they happen time to time.
Bulls need UTIL above 1034 to prove that stocks have game to the upside. This is a big deal. Lean in and listen closely, as if you heard someone mention EF Hutton's name, because for the next month, the important UTIL numbers are all above 1036. UTIL begins the week at 1023. If UTIL moves above 1034, the bulls are going to retake control of the stock market and run higher.
However, it may be short-lived because by Friday at 4 PM EST, at the end of the week, that number increases to 1067. Thus, even if UTIL can get above 1034 to help the bulls this week, it may not last long since 1067 for the week of 3/3/25 is a tall order. If UTIL remains below 1034 this week and for the next month, the stock market will remain soggy and weak.
If UTIL remains above 977, and below 1034, the stock market pullback will be modest, only the -3% to -5% variety that we almost have already. If UTIL drops from 1022 down through 1000 and then through 977, there is no hope for the stock market. There will only be carnage ahead with a -10% correction or -20% bear market or worse. Keep watching utilities.
It is really a fight between chips and vol if you want to look at something simple that will tell you the direction of the stock market for Monday. Bears win with SOX below 5119; stocks will drop like rocks. Bulls win with VIX below 16.61; stocks will stabilize and dip-buyers will begin sending equities higher.
If SOX remains above 5119, and VIX remains above 16.61, status quo, the stock market will chop along sideways. It will not tip its hand until SOX or VIX makes a decision. One of them will flinch.
Keybot prints one pre-scheduled number this week on Tuesday morning at 10 AM EST. Friday is EOM the last day of trading for February. March trading begins next Monday. The Boys Are Back in Town. If that chick don't wanna know, forget her.
3/2/25;
7:00 PM EST EOM =
2/25/25;
10:00 AM EST =
2/23/25; 7:00 PM EST = +16; signal line is +22
2/21/25; 1:02
PM EST = +16; signal line is +21; go short 6050; (Benchmark SPX for 2025
= +2.9%)(Keybot algo this trade = +2.2%; Keybot algo for 2025 = -1.8%)(Actual
results this trade = +2.3%; Actual results for 2025 = -0.4%)
