Sunday, February 9, 2020

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long heading into the new week of trading. The quant has been very quiet ever since it flipped long last Tuesday. The bulls are in control of the stock market with the algo number 25 points above the signal line. The SPX prints an all-time high last week at 3348.

Bulls need lower volatility and the VIX below 13.85 to guarantee upside fun ahead for equities. Each day the VIX cannot move below 13.85 is a big plus for the bears.

Bears need weaker banks and the XLF below 30.30. Bears also need weaker chips and the SOX below 1828. If 1 of the 2 turn bearish, the caution flag will be out. If both flip negative, the imminent turn to the short side will be in play, and then if the SPX drops below 3322, about a 5 point loss, Keybot will likely flip short. Markets remain erratic and unstable.

Keybot prints one pre-scheduled number in the week ahead on Friday morning.

2/16/20; 7:00 PM EST =
2/14/20; 10:00 AM EST = 
2/9/20; 7:00 PM EST = +56; signal line is +31
2/7/20; 9:00 AM EST = +56; signal line is +30
2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

Friday, February 7, 2020

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long with the US Monthly Jobs Report on tap in a few hours at 8:30 AM EST. The VIX is at 15.12 and S&P futures are -2. Copper tanks -1%. The quant has not printed a number since it flipped long on Tuesday morning.

The battle for stock market directional control is volatility and copper in the bear camp versus chips and banks in the bull camp. One of these four will flinch, perhaps this morning after the jobs report is known, and that will light the path forward.

Bulls need VIX below 13.84 and CPER above 16.91. The VIX 200-day MA can be used as an initial signal line and it sits at 15.12 exactly where price is now. After the jobs report, if the VIX falls below 15 and tracks lower, a run at the 13.84 bull-bear line in the sand is on tap which will determine the fate of stocks going forward. Obviously, if the VIX jumps higher above 15.12, the stock market will be selling off. Copper is negative this morning so the bull's hopes to pump copper higher to help the stock market appear formidable.

Bears need XLF below 30.29 and SOX below 1831. Looking at current prices, these bull-bear lines in the sand are about 2% to 3% above so the bears have their work cut out for them as well.

Volatility and banks are what matter. VIX 15.12, VIX 13.84, and XLF 30.29 tell you everything you need to know about stock market direction for the Friday session. Keybot prints a pre-scheduled number before the opening bell.

2/9/20; 7:00 PM EST =
2/7/20; 9:00 AM EST =
2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

Thursday, February 6, 2020

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long and did not print any numbers yesterday. The bulls are pumping retail stocks, banks and chips higher providing lift to the broad stock market. Bears obviously need to weaken these sectors or they got nothing.

Bulls will keep the party going with low volatility and higher copper. Bulls need VIX below 13.85 and/or CPER above 16.90. The VIX is currently trading at 15.33 and copper futures are up +0.4% about 4-1/2 hours before the opening bell for the US regular Thursday trading session. Copper was far higher a few hours ago.

Thus, the path forward and higher for the bulls and the stock market will only continue with lower volatility and higher copper.

2/9/20; 7:00 PM EST =
2/7/20; 9:00 AM EST =
2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

Wednesday, February 5, 2020

STOCK MARKET BULLISH -- LONG

Keybot the Quant is on the long side after yesterday's big rally on the PBOC money pump. The bulls are in control of stock market direction with the algo number 27 points above the signal line. Bulls are goosing copper this morning to continue the rally. Bulls will focus on sending copper higher and smacking volatility lower.

Bulls need the VIX below 13.90 to claim solid victory ahead. The VIX is now trading at 15.666 five hours before the opening bell for the US regular hump day trading session. S&P futures are up +26 staging a 32-point turnaround over the last hour so the bulls want to play some more.

Bears need to send the banks and chips lower to stop the stock market rally. Bears need XLF below 30.26 and/or SOX below 1828. Either parameter flipping into the bear camp will immediately stop the rally. If both turn bearish, and the SPX slips below 3281, trending lower, Keybot would likely flip short. The caution flag will be out if  one parameter turns bearish and the imminent turn to the short side will be in play if both turn bearish. Bears will also receive strength if retail stocks falter. Bears need RTH below 120.06.

Bulls are in the driver's seat. Copper, volatility, banks, chips and retail stocks are all in play and the major factors currently dictating stock market direction. The price action remains erratic and unstable.

2/9/20; 7:00 PM EST =
2/7/20; 9:00 AM EST =
2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

Tuesday, February 4, 2020

STOCK MARKET BULLISH -- LONG

Keybot the Quant flips long a few minutes after the opening bell at SPX 3288. The bulls goose the banks, retail stocks and chips resulting in euphoric upside glory. The bulls are in charge with the algo number 27 points above the signal line. The choppy whippy market action continues.

Volatility is the odd man out. The VIX remains in the bear camp. Thus, to continue the stock market joy, the bulls must push the VIX below 13.93. Stocks can rally all they want but if the VIX does not go under 13.93, the bulls got nothing, and the stock market will roll over to the downside again. If VIX goes sub 13.93, it is nothing but blue skies and rainbows ahead and Fed Chairman Powell will be carried around on adoring trader's shoulders to celebrate.

The bears need to pull one of the following three parameters back into their camp to stop the rally. Bears need RTH below 119.90, XLF below 30.26 and/or SOX under 1823. 

On the last trade, that ran for three days, the algo program and actual trading each lose a percent. The benchmark SPX is up a couple percent this year with the actual trading generated by Keybot up about +8% thus far this year. Keybot exits SH and enters SPY remaining in the 1x ETF's due to the whipsaw pricing action.

The bulls turned the tables on the bears this morning thanks to the PBOC promising endless supplies of easy money to pump stocks higher. Whoa. The SPX is up 51 points, +1.6% to 3300. Ding, ding. Sound the Seven Trumpets!

2/9/20; 7:00 PM EST =
2/7/20; 9:00 AM EST =
2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)
2/3/20; 3:41 PM EST = +8; signal line is +28
2/3/20; 3:36 PM EST = +24; signal line is +30
2/3/20; 3:29 PM EST = +40; signal line is +30 but algorithm remains short
2/3/20; 3:18 PM EST = +24; signal line is +31
2/3/20; 3:10 PM EST = +40; signal line is +31 but algorithm remains short
2/3/20; 1:55 PM EST = +24; signal line is +32
2/3/20; 1:43 PM EST = +40; signal line is +33 but algorithm remains short
2/3/20; 1:18 PM EST = +24; signal line is +33
2/3/20; 12:52 PM EST = +40; signal line is +34 but algorithm remains short
2/3/20; 12:38 PM EST = +24; signal line is +34
2/3/20; 12:24 PM EST = +40; signal line is +35 but algorithm remains short
2/3/20; 11:41 AM EST = +24; signal line is +35
2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short
2/3/20; 9:36 AM EST = +24; signal line is +35
2/2/20; 7:00 PM EST EOM = +8; signal line is +35
1/31/20; 1:15 PM EST = +8; signal line is +37
1/31/20; 10:05 AM EST = +24; signal line is +39
1/31/20; 10:00 AM EST = +40; signal line is +39 but algorithm remains short
1/31/20; 9:39 AM EST = +40; signal line is +40 but algorithm remains short
1/31/20; 9:36 AM EST = +56; signal line is +40 but algorithm remains short
1/30/20; 3:01 PM EST = +40; signal line is +39 but algorithm remains short
1/30/20; 2:15 PM EST = +24; signal line is +39
1/30/20; 12:34 PM EST = +8; signal line is +40
1/30/20; 11:24 AM EST = +24; signal line is +42
1/30/20; 10:50 AM EST = +8; signal line is +43
1/30/20; 10:40 AM EST = +24; signal line is +46; go short 3250; (Benchmark SPX for 2020 = +0.6%)(Keybot algo this trade = -1.0%; Keybot algo for 2020 = +1.9%)(Actual trading results this trade = -1.4%; Actual trading results for 2020 = +9.0%)

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

Keybot the Quant remains short. The algo prints 14 numbers yesterday a very active session. The bulls were full of bluster in the Monday session and then folded like a cheap suit into the closing bell. The bears are in charge of stock market direction with the algo number 20 points below the signal line. However, the bulls continue knocking at the door and S&P futures are up over 30 points about 3-1/2 hours before the opening bell for the regular US Tuesday trading session.

The bulls want to come and play on Tuesday so we will see what they got. Bulls need RTH above 119.90, XLF above 30.26, SOX above 1823 and/or VIX below 13.93. All four parameters are currently in the bear camp creating the stock market sogginess. The strength of the bullish relief rally directly depends on these four parameters. In other words, the move higher in the SPX is not as important as how many of the above four parameters flip bullish because this tells you the lasting strength of the stock market for the days ahead, or lack of strength if that will be the case.

If 1 of the 4 turn bullish, stocks will rally higher and the selling is over. If 2 of the 4 turn bullish, and the SPX moves above 3268, Keybot will likely flip long. If 3 of the 4 turn bullish, Keybot would likely flip long immediately regardless of SPX price, hence the imminent turn (to the long side) is in the title line and on the table.

Bears can allow one parameter to turn bullish without much damage but will be in trouble if 2 or more of the 4 parameters turn bullish. The stage is set. Don't worry so much about the rally in the stock indexes, instead monitor the 4 parameters since they tell you the true path forward.

Another thing you can watch is the first few minutes of price action in the S&P 500. Record the high print after the first 6 minutes of trading. Stocks may pop wildly higher after the opening bell, as the futures indicate, but may fall on their sword. So watch that SPX price high during the first minutes of trading. If the bears hold that level and prevent the S&P 500 from moving higher, they will have hope to hold back the bull rally.

2/9/20; 7:00 PM EST =
2/7/20; 9:00 AM EST =
2/3/20; 3:41 PM EST = +8; signal line is +28
2/3/20; 3:36 PM EST = +24; signal line is +30
2/3/20; 3:29 PM EST = +40; signal line is +30 but algorithm remains short
2/3/20; 3:18 PM EST = +24; signal line is +31
2/3/20; 3:10 PM EST = +40; signal line is +31 but algorithm remains short
2/3/20; 1:55 PM EST = +24; signal line is +32
2/3/20; 1:43 PM EST = +40; signal line is +33 but algorithm remains short
2/3/20; 1:18 PM EST = +24; signal line is +33
2/3/20; 12:52 PM EST = +40; signal line is +34 but algorithm remains short
2/3/20; 12:38 PM EST = +24; signal line is +34
2/3/20; 12:24 PM EST = +40; signal line is +35 but algorithm remains short
2/3/20; 11:41 AM EST = +24; signal line is +35
2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short

Monday, February 3, 2020

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

Keybot the Quant remains short but is champing at the bit to go long with the new trading week off and running. The bulls are goosing the retail stocks and banks to create the upside joy. Interestingly, the chips remain in the bear camp.

If the SOX moves above 1827 (now at 1810), or, if the SPX moves above 3282 (now at 3262), Keybot the Quant would likely flip long. Either condition would likely create the bull go-signal to go long.

Bears need to push the XLF below the 30.26 bull-bear line in the sand (now at 30.42) to regain control of stock market direction to the downside. Bulls need stronger chips while bears need weaker banks. Who will win?

2/7/20; 9:00 AM EST =
2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short
2/3/20; 9:36 AM EST = +24; signal line is +35
2/2/20; 7:00 PM EST EOM = +8; signal line is +35

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short. The bears finally stretch their muscles a little bit on Friday with a deep selloff. The algo wanted to go long on Thursday afternoon and Friday morning but the S&P 500 was trading negatively the whole day and 35 minutes into the session the wheels fell off the bus. The bears are in control of the market with the algo number 30 points below the signal line.

The month of January ends with the SPX down -0.2%. After all that market joy during the month, it ends in negativity. As January goes, so goes the year (typically).

The bears should exert steady downward force on the stock market as long as the algo number remains at +8 or lower. If the NYA Index would fall about -3%, that could potentially create a flash crash or all-out crash scenario.

The bulls are on their back feet but have lots of avenues to explore to develop calm and stop the downside selling. Bulls need RTH above 120.00, XLF above 30.32 and/or SOX above 1827. S&P futures are up +21 with the US regular Monday trading session set to open in about 20 minutes. Bulls need stronger retail stocks, banks and chips, respectively. The extent that these three parameters turn bullish, or not, dictate the strength of the relief rally.

If 1 of the 3 turn bearish, bulls are in the driver's seat today. If 2 of the 3 turn bullish, the imminent turn to the long side is in play and if the SPX would then move above 3282, a long way higher, Keybot would flip long. This is not likely today, but you never know. Bulls will likely try to turn 1 or 2 of the 3 parameters bullish today and then try to push the SPX higher tomorrow to win victory.

Caution is warranted if all 3 parameters turn bullish today because this may cause Keybot to immediately flip long; watch this very closely.

Bears simply need to keep the 3 parameters in their camp and they will spend the coming days slapping the bulls to and fro.

Keybot prints one pre-scheduled number this week on Friday morning. Watch the chips, retail stocks and banks since these three sectors are currently dictating broad stock market direction.

2/9/20; 7:00 PM EST =
2/7/20; 9:00 AM EST =
2/2/20; 7:00 PM EST EOM = +8; signal line is +35
1/31/20; 1:15 PM EST = +8; signal line is +37
1/31/20; 10:05 AM EST = +24; signal line is +39
1/31/20; 10:00 AM EST = +40; signal line is +39 but algorithm remains short
1/31/20; 9:39 AM EST = +40; signal line is +40 but algorithm remains short
1/31/20; 9:36 AM EST = +56; signal line is +40 but algorithm remains short
1/30/20; 3:01 PM EST = +40; signal line is +39 but algorithm remains short

Thursday, January 30, 2020

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

Keybot the Quant is on the short side but here we go again. Keybot is champing at the bit to go long with the algo number 1 point above the signal line but the internal parameters would not yet latch to permit the move. There is some nutso sideways choppy price action going on. The bulls goosed the semi's and the banks to create the afternoon surge higher in equities.

The stock market bears must push XLF back below 30.32 and SOX below 1830.45 as soon as possible. Either one turning bearish will stop the stock market rally. Both turning bearish would create momentum selling to the downside.

The bulls simply need the SPX to move above 3286 (starting the Friday session at 3284), only 2 points, to likely flip Keybot long. Humorously, this is the mirror image of last evening when the bears only needed 1 point lower. Same dealio. Bulls will benefit from a slow move higher in the SPX not a gap-up move which may trigger a timer and delay the move to the long side.

Bulls will be golden if the RTH moves above 119.96 and/or the VIX below 13.68. Thus, the Friday battle lines are drawn. Bears need weaker chips and banks. Bulls need stronger retail stocks and lower volatility. One of them will flinch and paint the path ahead. Markets are in a sloppy chop.

Keybot prints a pre-scheduled number shortly after tomorrow's opening bell. Bulls should watch the S&P futures overnight to see if they can muster up a couple positive points, or not.

2/2/20; 7:00 PM EST EOM =
1/31/20; 10:00 AM EST =
1/30/20; 3:01 PM EST = +40; signal line is +39 but algorithm remains short
1/30/20; 2:15 PM EST = +24; signal line is +39
1/30/20; 12:34 PM EST = +8; signal line is +40
1/30/20; 11:24 AM EST = +24; signal line is +42

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 3250 a short time ago. There is lots of strangeness going on in markets right now. The gap down open activated a timer that delayed the quant from flipping short, however, the deterioration in the stock market forced the move mid-morning. The chips failed into the bear camp at the bull-bear line in the sand at SOX 1830.60 but has since recovered.

Stock market direction is determined currently by a battle between the retail stocks and banks versus the chips. Bulls need the RTH above 119.96 and/or XLF above 30.32. If this occurs, the stock market selling will immediately stop and the bulls will begin a relief rally.

Bears need the chips to roll back over and for the SOX to take out 1830.60. If that happens today, stocks may get flushed down the toilet. SOX is trading at 1836 right now at munch time. The bears have it on a silver platter if they want it; all they need to do is squash the chips. Bears need to send the SOX 6 points lower and all Hades would break loose in the stock market; the carnage would begin.

Bulls have to keep the semiconductors elevated or they are dead meat.

The last trade only ran for 9 hours and 36 minutes so it is characterized as a whipsaw by the quant. Therefore, the robot drops down into the single 1x ETF mode and will not reenter 2x ETF's for at least 35 days. Keybot is a smart robot and must think that choppy markets are ahead which chew up bulls and bears alike. The single ETF's will reduce risk. Keybot exits QLD and enters SH. The benchmark S&P 500 has a smidgeon of a gain on the year. The Keybot computer program is up +1.6% on the year and the actual trading generated by Keybot is up +9% thus far this year.

2/2/20; 7:00 PM EST EOM =
1/31/20; 10:00 AM EST =
1/30/20; 11:24 AM EST = +24; signal line is +42
1/30/20; 10:50 AM EST = +8; signal line is +43
1/30/20; 10:40 AM EST = +24; signal line is +46; go short 3250; (Benchmark SPX for 2020 = +0.6%)(Keybot algo this trade = -1.0%; Keybot algo for 2020 = +1.9%)(Actual trading results this trade = -1.4%; Actual trading results for 2020 = +9.0%)
1/29/20; 3:54 PM EST = +24; signal line is +47 but algorithm remains long
1/29/20; 3:05 PM EST = +40; signal line is +48 but algorithm remains long
1/29/20; 10:21 AM EST = +56; signal line is +49
1/29/20; 10:06 AM EST = +40; signal line is +49 but algorithm remains long
1/29/20; 9:36 AM EST = +56; signal line is +50
1/28/20; 3:51 PM EST = +40; signal line is +51 but algorithm remains long
1/28/20; 3:30 PM EST = +56; signal line is +51
1/28/20; 3:13 PM EST = +40; signal line is +52 but algorithm remains long
1/28/20; 2:14 PM EST = +56; signal line is +53; go long 3283; (Benchmark SPX for 2020 = +1.6%)(Keybot algo this trade = +0.6%; Keybot algo for 2020 = +2.9%)(Actual trading results this trade = +0.8%; Actual trading results for 2020 = +10.4%)

Note Added 12:28 PM EST: Here we go. SOX is down to 1831 coming in for a test of the critical 1830.60. Strap yourself in. Attach crash helmets. Let's see what the bears got......... 1831.49 .....  1830.30... boom .....hold on to your hat........the SOX 1830.45 number is the exact bull-bear pivot  point... it is for all the marbles ...... SOX is currently printing at 1830.53.... the bull-bear battle is at a climax ..... the swords are rattling and both are at the top of the castle wall ..... one of them is about to fall over the edge...... the bears take a stab... 1830.29...... 1830.24 ... the bulls may be wounded...... oh my, the bull drops its sword as the blood is beginning to flow...... 1829-handle..... the bull springs back to life like the end of a scary movie....1830.08 ...... perhaps a little back kiss.... 1829...... we may see something very special in markets this afternoon....... whoopsies daisies...... 1828-handle..... do you hear a toilet flushing in the background?

Note Added 12:39 PM EST: There she goes. SOX fails; now printing 1825. Time to focus.

Wednesday, January 29, 2020

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

Keybot the Quant remains on the bull side as the battle rages on. The bears stick two shivs in the bulls gut into the closing bell today but it is not yet enough to flip the model short. Keybot is champing at the bit to go short but the internal parameters will not yet permit the move. The algo number is 23 big points below the signal line so the quant wants to be short.

If the SPX falls below 3272 (starting the Thursday session at 3273), so only one negative point lower, Keybot will likely flip short. The bulls must immediately push RTH above 119.95 and/or XLF above 30.32, either one would do, to stop the stock market selling. Bulls also benefit from lower volatility and if the VIX drops below 13.72.

If RTH and XLF remain bearish, stocks will fall apart, and if the chips then collapse, equities will drop down the rabbit hole. Bears need SOX below 1834 (now at 1859) to send the stock market into a tailspin. If the SOX fails, you will need to get the women and children inside and batten down the hatches; it will get ugly fast.

What does all that mumbo-jumbo mean? Keybot will likely flip short if the SPX begins the day negative and trends lower. A gap-down move in the SPX would not be helpful for bears since this may delay the quant flipping to the short side. A slow move lower is what the bears need during the Thursday session (in the beginning) and that will lead to a quicker drop after the robot locks-in the downside.

Bears win if they can turn chips negative sending the SOX below 1834; carnage will begin. Bulls will rejoice if they can push retail stocks and banks higher, volatility lower, and keep the semiconductors elevated and away from the bears grasp. As a side note with the chips, if SOX fails into the bear camp, especially out of the gate or in early trading, the quant may immediately flip short without hesitation, time will tell. This would be due to a subroutine running that identifies when the stock market is quickly deteriorating; if that situation is triggered, Keybot will immediate flip short.

It's on a silver platter if the stock market bears want it. Watch the overnight futures to see if the bears can scare up a negative point in the S&P's. Listen for any news on the large retailers and the banks since that will directly impact stock market direction. Watch and listen for any news on those chips. S&P futures are trading up +4.

2/2/20; 7:00 PM EST EOM =
1/31/20; 10:00 AM EST =
1/29/20; 3:54 PM EST = +24; signal line is +47 but algorithm remains long
1/29/20; 3:05 PM EST = +40; signal line is +48 but algorithm remains long
1/29/20; 10:21 AM EST = +56; signal line is +49
1/29/20; 10:06 AM EST = +40; signal line is +49 but algorithm remains long
1/29/20; 9:36 AM EST = +56; signal line is +50
1/28/20; 3:51 PM EST = +40; signal line is +51 but algorithm remains long

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

Keybot the Quant flips back to the long side on Tuesday, 1/28/20, in the afternoon at SPX 3283. The bulls goosed the retail stocks and banks to push stocks higher. The Fed started applying its jackboot onto the throat of volatility, sinking the VIX, which also squeezes out more upside price action for stocks. The algo was very active in the Tuesday session printing 10 numbers including the pre-scheduled number.

Despite the algo on the long side, the bears have the upper hand stabbing the banks in the ribs with a shiv right before the stock market closed. The algo number is 11 points below the signal line so Keybot is champing at the bit to whipsaw back to the short side. If the SPX drops below 3253 trending lower, Keybot will likely flip short, hence the imminent turn is in the title line. As the banks go, so goes the stock market. Bulls need XLF above 30.32 to continue the relief rally.

Bears must keep the financials weak with XLF remaining below 30.32, while pulling retail stocks lower. Bears need RTH below 119.96 to restart the stock market negativity.

Bulls need the VIX below 13.60, if this occurs, stocks will be catapulting higher. If the stock market rallies today, but the VIX does not go sub 13.60, it is a fake-out move and stocks will likely weaken again. The VIX is currently trading at the 15.51 palindrome three hours before the opening bell for the regular US hump day trading session.

Thus, bulls win by keeping retail stocks strong, rallying the banks and pushing volatility lower. Bears win by keeping the banks weak, slapping the retailers lower and pushing volatility higher.

Stay alert for a whipsaw in these erratic markets. It will be unfortunate for both bulls and bears if markets go into a sideways choppy pattern for a few weeks since that only serves to turn everyone into mince meat and chop suey. If XLF moves above 30.32, the bulls will be in firm control of the stock market.

On the last trade, which ran about four days, the algo program gains +0.6% and the actual trading gains +0.8%. For the year thus far, after 3-1/2 weeks of trading, the S&P 500 benchmark index is up +1.6%. The Keybot the Quant algorithm program is up almost +3% and the actual trading generated by Keybot is up over +10%. Keybot exits QID and enters QLD remaining in the 2x leveraged ETF's.

Remember, as the banks go, so goes the markets. S&P futures are up +8. Also remember, if stocks rally, but the VIX cannot drop below 13.60, equities will likely weaken again going forward. You can also use VIX 14.97 as an early signal; below 14.93 tells you the bulls are strong and gathering strength. If the bulls cannot push the VIX below 14.97, they got butpkis. The beat goes on.

2/2/20; 7:00 PM EST EOM =
1/31/20; 10:00 AM EST =
1/28/20; 3:51 PM EST = +40; signal line is +51 but algorithm remains long
1/28/20; 3:30 PM EST = +56; signal line is +51
1/28/20; 3:13 PM EST = +40; signal line is +52 but algorithm remains long
1/28/20; 2:14 PM EST = +56; signal line is +53; go long 3283; (Benchmark SPX for 2020 = +1.6%)(Keybot algo this trade = +0.6%; Keybot algo for 2020 = +2.9%)(Actual trading results this trade = +0.8%; Actual trading results for 2020 = +10.4%)
1/28/20; 1:40 PM EST = +40; signal line is +55
1/28/20; 11:57 AM EST = +56; signal line is +56 but algorithm remains short
1/28/20; 11:13 AM EST = +40; signal line is +58
1/28/20; 10:38 AM EST = +56; signal line is +60
1/28/20; 10:22 AM EST = +40; signal line is +61
1/28/20; 10:00 AM EST = +24; signal line is +62
1/27/20; 9:36 AM EST = +24; signal line is +65
1/26/20; 7:00 PM EST = +56; signal line is +66
1/24/20; 3:54 PM EST = +56; signal line is +68
1/24/20; 3:45 PM EST = +40; signal line is +68
1/24/20; 3:08 PM EST = +56; signal line is +70
1/24/20; 3:02 PM EST = +40; signal line is +70
1/24/20; 2:07 PM EST = +24; signal line is +72
1/24/20; 2:00 PM EST = +40; signal line is +74
1/24/20; 11:24 AM EST = +56; signal line is +75
1/24/20; 11:04 AM EST = +70; signal line is +76
1/24/20; 10:35 AM EST = +56; signal line is +75
1/23/20; 1:25 PM EST = +70; signal line is +76
1/23/20; 1:06 PM EST = +56; signal line is +75
1/23/20; 12:14 PM EST = +70; signal line is +76
1/23/20; 11:00 AM EST = +56; signal line is +75
1/23/20; 10:34 AM EST = +70; signal line is +76
1/23/20; 10:27 AM EST = +56; signal line is +76
1/23/20; 10:12 AM EST = +70; signal line is +76
1/23/20; 9:36 AM EST = +56; signal line is +76; go short 3304; (Benchmark SPX for 2020 = +2.3%)(Keybot algo this trade = +2.3%; Keybot algo for 2020 = +2.3%)(Actual trading results this trade = +9.6%; Actual trading results for 2020 = +9.6%)

Sunday, January 26, 2020

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is short heading into the new week of trading; the last week of January. The month of trading ends on Friday, 1/31/20, EOM, and February trading will begin Monday, 2/3/20.

The bears are in charge of the stock market but the bulls pushed back late-day Friday. The algo number is 10 points below the signal line. Interestingly, the SPX fell from 3333 to 3281 intraday Friday; a big 52 point retreat. The bulls and bears continue to battle, however, and perhaps after this week a clearer winner will surface.

Very simply, bulls need lower volatility and they will ride the glory train to new stock market highs. Bears need weaker retail and bank stocks and they will begin slashing off chunks of bull flesh. Bulls need VIX below 13.58 (now at 14.56) and they will throw confetti and claim victory going forward.

Bears need RTH below 119.93 (now at 120.10) and/or XLF below 30.31 (now at 30.39) and they will celebrate stock market carnage. Either one of the two will immediately sicken the stock market and if both turn bearish, the stock market will take out Friday's lows and begin falling in earnest.

If VIX remains in the bear camp, and RTH and XLF in the bull camp, status quo, stocks will chop sideways with a slight downward bias. One of these three characters is going to flinch and that will immediately tell you the path forward for the stock market. The VIX begins trading at 3 AM EST so that will provide a heads-up for the trading day ahead in the States.

Keybot prints two pre-scheduled numbers this week one on Tuesday morning and the other on Friday morning. The table is set. The battle lines are drawn. The bulls need rich Uncle Fed and the other central bankers to press their jackboots against the throat of volatility to create stock market joy. The bears need to hear bad news on the retailers and banks overnight.

The caution flag is out. If the VIX goes sub 13.58, consider the imminent turn to the long side to be in play, and then if the SPX moves above 3333, which would be a huge 38 point up day for the S&P 500 on Monday, Keybot will likely flip back to the long side.

The bears have it on a silver platter if they want it. All they have to do is pound the retailers and banks. If they do, they win, if not, they got buptkis and will fold like a cheap suit. This week may write epic stock market history. Markets remain erratic and unstable.

2/2/20; 7:00 PM EST EOM =
1/31/20; 10:00 AM EST =
1/28/20; 10:00 AM EST =
1/26/20; 7:00 PM EST = +56; signal line is +66
1/24/20; 3:54 PM EST = +56; signal line is +68

Saturday, January 25, 2020

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short to end the week. Bulls and bears decide on a truce for the weekend but Monday the war will resume. The bulls jammed the retail stocks and banks higher into the closing bell creating the intraday recovery of stocks off their worst levels.

For Monday, it will be simple. Bulls need lower volatility and that will lead the way to a resumption of the multi-month stock market rally. Bears need lower retail stocks and banks which will flush the stock market down the toilet. One side or the other will flinch.

The bears are in charge of stock market direction currently with the algo number 12 points below the signal line. The quant was active during the Friday session printing nine numbers. The caution flag is out since the bulls do not plan to roll over and die peacefully; they plan on fighting. The Fed will be jamming volatility lower trying to right the market ship on Monday.

1/26/20; 7:00 PM EST =
1/24/20; 3:54 PM EST = +56; signal line is +68
1/24/20; 3:45 PM EST = +40; signal line is +68
1/24/20; 3:08 PM EST = +56; signal line is +70
1/24/20; 3:02 PM EST = +40; signal line is +70
1/24/20; 2:07 PM EST = +24; signal line is +72

Friday, January 24, 2020

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. Both retail stocks and banks give up the ghost creating the downside drop in stocks. Bulls are trying to push RTH back above the key 119.93 level and XLF back above the key 30.31 level to prevent a bloodbath. These two parameters tell you everything you need to know about stock market direction.

The bears are in charge with the algo number now 48 points below the signal line. The bears are cruising. Strap yourself in for the remainder of the day keeping water and rations handy. If the retail stocks and banks remain in the bear camp, there will be H*ll to pay into the closing bell. The SPX is at 3289.

1/26/20; 7:00 PM EST =
1/24/20; 2:07 PM EST = +24; signal line is +72
1/24/20; 2:00 PM EST = +40; signal line is +74
1/24/20; 11:24 AM EST = +56; signal line is +75

Note Added 2:17 PM EST: SPX 3285. VIX 15.58. XLF 30.25. RTH 119.90. Goodnight Irene, Irene goodnight.

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. The quant continues to be active this week printing three numbers thus far today. Stocks were still joyous after yesterday afternoon but negative news on the coronavirus sends equities lower today. You saw that commodities and copper remain weak, so you knew stocks would roll back over to the downside. The bears are in control with the algo number 19 points below the signal line.

Volatility spikes higher with the VIX poking above the critical 13.58 level now at 14.14. Volatility pops so stocks drop. The bears are growling today; it is not overwhelming, but they are taking a bite of bull flesh and nibbling on it.

Bulls need VIX below 13.58 pronto to stop the stock market selling. Bulls must also push copper and commodities higher if they want to take the stock market higher.

Bears need weaker retail stocks and banks to begin accelerating the stock market south. Bears need RTH below 120.00 and/or XLF under 30.31. Either one failing into the bear camp will create immediate sickness in stocks with a big leg lower. The other parameter will quickly follow and stocks would likely fall apart.

The battle lines are drawn. Bulls need lower volatility and higher copper and commodities. Bears need to sustain higher volatility while punching the retail stocks and banks in the face. Bulls will cheer if they can get the VIX back below 13.58. Bears win going forward if the VIX remains above 14 climbing higher. No doubt the central banks are in there right now.

1/26/20; 7:00 PM EST =
1/24/20; 11:24 AM EST = +56; signal line is +75
1/24/20; 11:04 AM EST = +70; signal line is +76
1/24/20; 10:35 AM EST = +56; signal line is +75
1/23/20; 1:25 PM EST = +70; signal line is +76

Note Added 1:38 PM EST: The banks are failing causing the drastic dips in the stock market. XLF came down to kiss the 30.31 level that Keybot called out ahead of time, and bounced, now it rolled over again and is coming back down for another look. XLF is at 30.33 only 2 points in the bull camp. If XLF fails at 30.31, you will see a big flush lower in the stock market. It is ony pennies away. The bulls must hold the line at XLF 30.31 and prevent it from failing. The drama continues..... it is in the bank's hands now ........ 30.35 .... 30.33 .....30.32........ ho, whoa, ho, here's 30.31, this tells you the fate of the stock market for the remainder of the day.........bounce or die......

Thursday, January 23, 2020

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side with copper and commodities providing the double-barreled bear power. News reports in the afternoon downplay the coronavirus so traders strip off their face masks and shun the antibacterial soap and begin buying stocks like madmen. Copper and commodities remain weak. Bulls need to push CPER above 17.36 (now at 17.14) and GTX above 2510 (now at 2458) to regain control of the stock market.

The bears are in control with the algo number 6 points below the signal line. Bears need to keep copper and commodities in the bear camp while pushing volatility higher. The Fed has their footprint all over the VIX today jamming it lower to pop equities. Bears need VIX above 13.58 (now at 12.98). Isn't it a nice touch that the market makers painted the VIX with a 12-handle?; like putting lipstick on a pig.

The battle lines are set in stone. Bulls win with higher copper and commodities. Bears win with higher volatility. Who will win? Watch the copper futures overnight and the VIX begins trading at 3 AM EST which will provide an early heads-up on the way forward.

If GTX or CPER turns bullish, either one would do, consider the imminent turn to the long side to be in play, and then if the SPX is trading above 3327 and trending higher, Keybot would likely whipsaw back to the long side. As copper goes, so goes the market. Tomorrow, Friday, we see what the bears are truly made of; the ball is in their hands.

1/26/20; 7:00 PM EST =
1/23/20; 1:25 PM EST = +70; signal line is +76
1/23/20; 1:06 PM EST = +56; signal line is +75

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side and volatility continues to battle at the VIX 13.58 line in the sand. The bears are in control of the stock market with the algo number 19 points below the signal line. Keep watching VIX 13.58; it will tell you a lot. The VIX is at 13.62, in the bear camp, causing negativity in the stock market.

1/26/20; 7:00 PM EST =
1/23/20; 1:06 PM EST = +56; signal line is +75
1/23/20; 12:14 PM EST = +70; signal line is +76
1/23/20; 11:00 AM EST = +56; signal line is +75

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 3304 after the opening bell. After several weeks of drama (look at how many times the quant threatened to go short below), Keybot the Quant calmly slips into the bear camp without fanfare. Copper fails this morning and volatility spikes higher creating negativity in the equities market. The VIX beachball, that Fed Chairman Powell fights to keep underwater each day, slipped from his hands and jumps higher.

Volatility is playing around to and fro on the VIX 13.58 bull-bear line in the sand identified by Keybot. This tells you a lot about market direction. VIX is printing at 13.80 in real-time as this is typed, in the bear camp, creating stock market negativity.

Copper and commodities are looking quite soggy, both in the bear camp, so a whipsaw move would not be anticipated, but, as always, Keybot only sees 1's and 0's and anything can happen, even a whipsaw back to the long side. For now, the bears are in the driver's seat after the long multi-month Federal Reserve money pump. The algo number is 19 points below the signal line.

Bulls must push the VIX below 13.58 immediately and GTX above 2512 and CPER above 17.36. Bulls will likely need at least 2 of these 3 parameters back in the bull camp to stop the bleeding going forward. Now we see what the bears got.

On the last trade, which is the first direction change for Keybot this year, the algo program gains +2.3% the same as the benchmark S&P 500 index thus far this year. The actual trading is up almost +10% already this year, in only 3 weeks time; a smart person would pull the plug on Keybot the Quant and go to the beach the rest of the year focusing on exciting tanned bodies instead of boring computer printouts.

The outperformance in the actual trading is due to the 2x tech ETF QLD. Investors are tripping over each other to buy tech stocks. That hints that a lot of young people, making lots of dough working at tech companies, are buying what they think they know (tech companies). Idiots. They will get their heads handed to them as the year plays out. Keybot exits QLD and enters QID the 2x inverse tech ETF (QID moves up twice as fast as tech stocks move lower, or, it collapses twice as much if tech stocks move higher).

1/26/20; 7:00 PM EST =
1/23/20; 11:00 AM EST = +56; signal line is +75
1/23/20; 10:34 AM EST = +70; signal line is +76
1/23/20; 10:27 AM EST = +56; signal line is +76
1/23/20; 10:12 AM EST = +70; signal line is +76
1/23/20; 9:36 AM EST = +56; signal line is +76; go short 3304; (Benchmark SPX for 2020 = +2.3%)(Keybot algo this trade = +2.3%; Keybot algo for 2020 = +2.3%)(Actual trading results this trade = +9.6%; Actual trading results for 2020 = +9.6%)
1/22/20; 1:33 PM EST = +86; signal line is +76
1/22/20; 10:50 AM EST = +70; signal line is +76 but algorithm remains long
1/22/20; 9:36 AM EST = +86; signal line is +77
1/19/20; 7:00 PM EST = +100; signal line is +77
1/17/20; 10:00 AM EST = +100; signal line is +76
1/17/20; 9:00 AM EST = +100; signal line is +76
1/14/20; 3:59 PM EST = +88; signal line is +75
1/14/20; 10:08 AM EST = +72; signal line is +74 but algorithm remains long
1/14/20; 9:41 AM EST = +88; signal line is +75
1/13/20; 3:51 PM EST = +72; signal line is +74 but algorithm remains long
1/13/20; 2:32 PM EST = +88; signal line is +75
1/13/20; 1:02 PM EST = +72; signal line is +75 but algorithm remains long
1/13/20; 12:37 PM EST = +88; signal line is +76
1/12/20; 7:00 PM EST = +72; signal line is +76 but algorithm remains long
1/10/20; 12:00 PM EST = +72; signal line is +76 but algorithm remains long
1/10/20; 11:15 AM EST = +88; signal line is +77
1/10/20; 9:00 AM EST = +72; signal line is +76 but algorithm remains long
1/8/20; 7:50 AM EST = +72; signal line is +77 but algorithm remains long
1/8/20; 7:15 AM EST = +58; signal line is +77 but algorithm remains long
1/8/20; 6:43 AM EST = +72; signal line is +78 but algorithm remains long
1/8/20; 3:06 AM EST = +58; signal line is +79 but algorithm remains long
1/7/20; 10:12 AM EST = +72; signal line is +80 but algorithm remains long
1/7/20; 8:40 AM EST = +58; signal line is +80 but algorithm remains long
1/6/20; 3:48 PM EST = +72; signal line is +80 but algorithm remains long
1/6/20; 3:38 PM EST = +58; signal line is +80 but algorithm remains long
1/6/20; 3:02 PM EST = +72; signal line is +79 but algorithm remains long
1/6/20; 9:36 AM EST = +58; signal line is +79 but algorithm remains long
1/6/20; 3:06 AM EST = +74; signal line is +78 but algorithm remains long
1/5/20; 7:00 PM EST = +88; signal line is +75
1/3/20; 9:41 AM EST = +88; signal line is +75
1/3/20; 3:06 AM EST = +74; signal line is +73
1/1/20; Begin 2020 Data Set = +88; signal line is +71; go long 3231; (Benchmark SPX for 2020 = 0%)(Keybot algo this trade = 0%; Keybot algo for 2020 = 0%)(Actual trading results this trade = 0%; Actual trading results for 2020 = 0%)

Keybot the Quant Begins 2020 on the Long Side from SPX 3231. All Data 0%. Begin 2020.

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

Keybot the Quant remains long. The SPX prints a new all-time record high at 3337.77 on Wednesday, 1/22/20, and then falls on its sword. The bears, however, once again snatch defeat from the jaws of victory. Bears had the stock market on a silver platter yesterday but simply did not have the juice to get the job done; it must be all that eggnog, and cookies, desserts and the holiday cheer aftermath weighing the fur-bearers down.

The market makers jammed copper higher in the afternoon yesterday to prevent the bears from taking over control of the stock market direction. The fix was in at 1:30 PM EST. The bulls remain in control of the stock market with the algo number 10 points above the signal line.

However, it is not all wine and roses for the bulls. Copper is teetering on the edge of falling back into the bear camp. Bears need CPER below 17.36 to create market gloom which is only 4 pennies lower. This represents about a -0.2% drop in copper and the copper futures are currently down -0.3% so the bears are smiling.

Bears would also benefit from VIX moving above 13.58. VIX is currently trading at 13.20 as this message is typed about 4-1/2 hours before the opening bell for the regular US Thursday trading session. Bears got nothing unless they can pump the VIX another 38 cents higher. The Fed and other central bankers maintain their jackboots on the throat of volatility.

Commodities are in a stealth 3-week collapse. The novel coronavirus is adding to the retreat. Bulls must keep copper and commodities elevated to keep the stock market elevated. Bulls need to keep CPER above 17.36 and must push GTX back above 2512. GTX failed into the bear camp yesterday creating the market sogginess that extends into this morning. S&P futures are down -2.

The sick commodities are casting a pall over the stock market that could do no wrong for the last four months (since stocks are always supported by rich Uncle Fed to protect the wealthy privileged class). Looking at current price conditions, bulls need stronger commodities while bears need weaker copper and higher volatility. For the remainder of the week, as copper goes, so goes the stock market.

Thus, copper is set to fail back into the bear camp at the opening bell if the current copper futures remain weak. This will set the algo up to flip short again, however, the quant likely needs to see the SPX below 3320 and trending lower to flip short. The SPX begins the Thursday session at 3322 so the bears only need 2 down points on the S&P 500 to wreak havoc (as long as copper remains and becomes weaker). The imminent turn notation remains in the title line and Keybot the Quant could potentially flip short after the opening bell. Time will tell. Pay attention to copper.

1/26/20; 7:00 PM EST =
1/22/20; 1:33 PM EST = +86; signal line is +76
1/22/20; 10:50 AM EST = +70; signal line is +76 but algorithm remains long