Friday, July 25, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips back to the short side today at SPX 1975 in a fickle trading environment. SOX remains bearish and VIX drifts higher today which maintained the downward selling pressure in equities. The algo was within seconds of triggering short at 1979 but did not, then at 1978 but did not, but then at 1975 near the lows of the day, the parameters all latch and the algo commits to the short side. SOX 624 is a big deal come Monday morning. VIX and RTH are also greatly impacting market direction so semiconductors, volatility and retail stocks rule the roost. Levels of interest can be identified once the Sunday pre-scheduled number prints.

The Keybot algorithm program loses -0.3% on the last trade and the actual trading loses -0.6%. The algo cycled out of SSO and into QID remaining in double X ETF's. The algo flip-flops twice, every three days over the last six days, first to the short side, then back to the long side, now back to the short side. This behavior highlights indecision in markets. Listen over the weekend for any news concerning chip and retail stocks. The bears are driving the bus.

7/27/14; 7:00 PM EST =
7/25/14; 11:25 AM EST = +50; signal line is +64; go short 1975; (Benchmark SPX for 2014 = +6.9%)(Keybot this trade = -0.3%; Keybot for 2014 = +5.0%)(Actual this trade = -0.6%; Actual for 2014 = +5.4%)
7/25/14; 9:36 AM EST = +50; signal line is +65 but algorithm remains long
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%)

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

Keybot the Quant remains long but is champing at the bit to go short. The algo number is under the signal line and the program is beginning to latch-in the parameters to trigger a move to the short side, but, not yet. Semiconductors experience a severe failure today. Markets will weaken moving forward as long as SOX remains under 624 (now at 619). If the SPX drops under 1979, and remains under for about five minutes, Keybot will likely flip short. SPX is now printing at 1981.

Remain alert, it appears that the bears may make a strong run lower today. VIX is 12.12 remaining under the 12.95 bull-bear danger line helping bulls. All Hades will break loose with accelerated downside selling if the VIX moves above 12.95. Equities will recover today if the SOX (semiconductors) moves higher.

7/27/14; 7:00 PM EST =
7/25/14; 9:36 AM EST = +50; signal line is +65 but algorithm remains long
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%)

Thursday, July 24, 2014

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

Keybot the Quant is long heading into the Friday session to end the week. The algo is simply idling along and not printing any numbers since Tuesday. The bulls are driving the bus. Bears need either VIX 12.95 and/or SOX 624.25 to develop sustainable market downside. If either of these turn bearish, and the SPX loses the 1986 level, Keybot will likely flip short. If both parameters remains bullish then stocks will float sideways to higher into the weekend.

For the SPX starting at 1988, at new all-time highs, the bulls need to push up through 1991, only three points higher, and price will be running towards 2000 in quick order. The bears need to push under 1986, only two points lower, to accelerate the downside. If the downside occurs, simply watch to see if VIX 12.95 or SOX 624.25 occurs, if so, markets will begin crumbling lower, if not, markets will recover.

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%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the Thursday trading session is underway. The algo has not printed any numbers since flipping long on Tuesday. Bulls continue to cruise higher since volatility remains low. The algo is tracking VIX 12.95 so the market bears cannot create any negativity with VIX over one point under. Interestingly, semiconductors are back in vogue as a key market driver again. The algo is now tracking SOX 523.90 as a bull-bear line in the sand. SOX is printing a 529 handle creating buoyant equity markets but a drop of 5 more handles is going to create broad market selling. At SOX 529, bulls are still not particulary worried.

For the SPX today, now printing at 1989.60 and printing a new all-time intraday high at 1990.10 a short time ago, needs to hold the 1989.50 plus level for a few minutes and this will then create an upside acceleration, so the current price action is very important. Market bears need to push under 1982.50 to regain downside mojo. A move through 1983-1989 is sideways action. Bears need VIX 12.95 or SOX 523.90 or they got nothing. Since these targets are not within direct reach right now, the imminent turn notation is removed. The bulls are in charge. 

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%)

Tuesday, July 22, 2014

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

Keybot the Quant is on the long side with volatility running the show. Watch VIX 12.96, now at 12.24 causing market lift. Bears need VIX 12.96 or they got nothing. If the VIX moves above 12.96, and the SPX drops under 1976, Keybot will likely flip back to the short side.

For the SPX for Wednesday starting at 1984, the bulls need two points, to push above 1986 and the upside party continues to 1990. The bears need to push under 1976 to accelerate the downside. A move through 1977-1985 is sideways action. VIX 12.96 is steering the market directional ship. The imminent turn notation remains since the bears may whipsaw the markets in reverse without too much effort.

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%)

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%)

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

Keybot the Quant remains short but the bears folded like a cheap suit once volatility dropped. The VIX is under the bull-bear line at 12.96 so equities will move higher. Bears need VIX above 12.96 or they got nothing. Keybot is champing at the bit to go long and is latching in parameters to permit the move. If the SPX prints above 1977, the algo will likely flip to the long side. S&P futures are +6 forecasting a strong start to the day but the open remains four hours away. A gap-up open may trigger a timer that will delay the move to the long side for about 90 minutes.

For the SPX starting at 1974, the bulls need to touch the 1977 handle and the upside will accelerate above 1980 on its way to test the all-time highs. The bears need to push under 1966 to accelerate the downside. A move through 1967-1976 is sideways action for Tuesday. The bears are driving the bus but the bulls appear ready to take over again. Pay attention to the intraday high prints as they occur today. The algo number is only two points above the signal line but that will be enough to create a flip to the long side if the other internal program parameters latch into place. VIX 12.96 identifies the winner.

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

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