Wednesday, May 24, 2017

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the intense market drama continues. Keybot prints an astounding and rare +100 number representing the maximum possible reading for the algorithm (which is an oscillator at its heart). A +100 number represents an off-the-charts uber bullish stock market and likely a significant multi-week, month and/or year top forming.

Comically, the rare +100 number is becoming more and more common. The times that +100 has printed over the near 9-year life of the model is six times; 12/19/16-12/25/16; 1/17/17-1/19/17; 1/31/17; 2/10/17-3/5/17; 4/15/17 and now. Just think, at some point in the future, maybe two or three years down the road, the algo may be printing at -100.

Copper, financials, volatility and commodities continue to rule the roost and dictate broad stock market direction. Note that JJC closed exactly on the 29.47-29.48 level called out by the algorithm before it happened. That is always impressive when it happens with regularity. The banks turned bullish with XLF above 23.55 which created yesterday's rally. Obviously. the pivot from JJC 29.47 dictates market direction. Copper trades lower overnight. The banks, the XLF 23.55 level, remains key as well.

The market bears will benefit if VIX moves above 11.81 (now at 10.49) and/or GTX below 2291 (now at 2301). The key is copper and banks. Bulls will be taking stocks far higher with the SPX running above 2400 if JJC moves above 29.48 and XLF stays above 23.55 with both moving higher.

If JJC dips under 29.47 and moves lower, the stock market rally will stall. If XLF slips under 23.55, stocks will begin selling off more aggressively. The beat goes on.

5/28/17; 7:00 PM EST =
5/26/17; 10:00 AM EST =
5/23/17; 3:09 PM EST = +84; signal line is +65
5/23/17; 2:28 PM EST = +100; signal line is +63
5/23/17; 2:16 PM EST = +84; signal line is +62
5/23/17; 9:36 AM EST = +68; signal line is +59
5/22/17; 1:18 PM EST = +84; signal line is +58

Tuesday, May 23, 2017

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips to the bull side yesterday at SPX 2390. Interestingly, both the commodities (GTX) and volatility (VIX) turned bullish creating higher stock prices. In the afternoon, copper turned bullish which was a punch to the bear's soft belly. Markets remain in the sideways choppy pattern that chews up bulls and bears alike. Low volatility wreaks havoc on trading algorithms.

Copper will immediately tell you broad stock market direction today. Watch JJC 29.47 at the opening bell. Price is at 29.50 in the bull camp that caused lift in the stock market late yesterday. Market bears need JJC to fall under 29.47 and head lower which will signal that further upside in equities will not occur. Bulls win if copper keeps moving higher. Copper is down -0.5% in trading overnight.

Market bulls need the higher copper to keep the upside going and then need stronger banks. Financials are the laggard and XLF will need to move above 23.55 (now at 23.41) to prove that the SPX will jump above 2400 and rock and roll higher. Bears are fine if they can keep XLF under 23.55 and send JJC under 29.47.

Market bears need JJC under 29.47 and either GTX under 2291 or VIX above 11.81. If 2 of these 3 occur and the SPX drops under 2387, Keybot will likely whipsaw back to the short side.

On the last trade that only lasted three days, the Keybot computer program loses -0.6% and the actual trading dumps about -1%. For the year thus far, the SPX benchmark index is up a healthy +6.7%. The algorithm program is down -0.7%. The actual trading is down about -5% thus far this year. The sideways choppiness should subside in the weeks ahead.

For today, simply watch JJC 29.47, XLF 23.55, VIX 11.81 and GTX 2291. They will tell you everything you need to know about broad stock market direction; copper, banks, volatility and commodities, respectively.

5/28/17; 7:00 PM EST =
5/26/17; 10:00 AM EST =
5/22/17; 1:18 PM EST = +84; signal line is +58
5/22/17; 9:38 AM EST = +68; signal line is +57; go long 2390; (Benchmark SPX for 2017 = +6.7%)(Keybot algo this trade = -0.6%; Keybot algo for 2017 = -0.7%)(Actual results this trade = -0.9%; Actual results for 2017 = -5.2%)
5/22/17; 9:36 AM EST = +54; signal line is +56
5/21/17; 7:00 PM EST = +40; signal line is +55
5/17/17; 9:57 AM EST = +40; signal line is +56; go short 2376; (Benchmark SPX for 2017 = +6.1%)(Keybot algo this trade = +0.0%; Keybot algo for 2017 = -0.1%)(Actual results this trade = +0.2%; Actual results for 2017 = -4.3%)

Sunday, May 21, 2017

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

Keybot the Quant remains bearish which is surprising considering the market joy late last week. To prove that up is the direction for the stock market one of these four things need to happen; either GTX above 2290 (now only 1 point away at 2289), VIX above 11.77 (now at 12.04), JJC above 29.51 (now at 29.33) or XLF above 23.59 (now at 23.35). Commodities are important along with volatility, copper and financials, respectively.

If either JJC moves above 29.51 and/or XLF above 23.59, either one would do, and the SPX moves above 2389, Keybot will likely flip long hence the imminent turn notation in the title line. if either commodities or volatility turn bullish, this may not be enough to cause the algo to go long unless both turn bullish.

Market bears will benefit from weaker retail stocks and the equity market will collapse if RTH loses 80.33 (now at 81.94). Keybot prints one pre-scheduled number this week on Friday morning. The beat goes on.

5/28/17; 7:00 PM EST =
5/26/17; 10:00 AM EST =
5/21/17; 7:00 PM EST = +40; signal line is +55
5/17/17; 9:57 AM EST = +40; signal line is +56; go short 2376; (Benchmark SPX for 2017 = +6.1%)(Keybot algo this trade = +0.0%; Keybot algo for 2017 = -0.1%)(Actual results this trade = +0.2%; Actual results for 2017 = -4.3%)

Friday, May 19, 2017

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

Keybot the Quant is on the short side but the bulls are staging a comeback. The algo has not printed any numbers since it went short on Wednesday. Interestingly, the rally action after the Wednesday selloff in stocks does not result in the algorithm printing any higher numbers, so far.

That may change at anytime and Keybot is tracking several key parameters. The upside rally will be confirmed and have legs if XLF moves above 23.59, or VIX below 11.76, or JJC above 29.50 or GTX above 2289. So bulls need higher banks, lower volatility, higher copper and higher commodities. If all four remain bearish, the stock market rally will likely peter out and roll over to the downside.

If one of the four turn bullish, Keybot may be in position to flip back to the long side. Market bears must hold the line on the four parameters listed.

5/21/17; 7:00 PM EST =
5/17/17; 9:57 AM EST = +40; signal line is +56; go short 2376; (Benchmark SPX for 2017 = +6.1%)(Keybot algo this trade = +0.0%; Keybot algo for 2017 = -0.1%)(Actual results this trade = +0.2%; Actual results for 2017 = -4.3%)

Thursday, May 18, 2017

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side on Wednesday morning at SPX 2376 the market is dragged lower by weak banks and higher volatility. The algo number is 16 points under the signal line with the bears in control. Bears will receive further downside strength if retail stocks weaken with RTH under 80.15 (now causing lift in the stock market at 80.69).

The bulls will signal an end to the stock market selling if either XLF moves above 23.59 (now at 23.06) or VIX under 11.95 (now at 15.59).

Keybot flips short at the same exact SPX 2376 level that it went long at on the way up resulting in zero percent change for the algo program. The actual trading is also flat on the last trade. The benchmark S&P 500 Index remains up +6.1% so far this year. Keybot exited DIA and entered SDS. The 35 day timer has expired from the whipsaw moves in early April so the algo is now using 2x ETF's again.

Bears need weaker retail stocks and weaker semiconductors. Bulls need stronger banks and lower volatility. The beat goes on.

5/21/17; 7:00 PM EST =
5/17/17; 9:57 AM EST = +40; signal line is +56; go short 2376; (Benchmark SPX for 2017 = +6.1%)(Keybot algo this trade = +0.0%; Keybot algo for 2017 = -0.1%)(Actual results this trade = +0.2%; Actual results for 2017 = -4.3%)
5/17/17; 9:36 AM EST = +40; signal line is +55 but algorithm remains long
5/16/17; 9:00 AM EST = +70; signal line is +56
5/15/17; 9:36 AM EST = +70; signal line is +55
5/14/17; 7:00 PM EST = +54; signal line is +54 but algorithm remains long
5/12/17; 10:00 AM EST = +54; signal line is +54 but algorithm remains long
5/12/17; 9:36 AM EST = +54; signal line is +54 but algorithm remains long
5/11/17; 11:13 AM EST = +70; signal line is +54
5/11/17; 10:23 AM EST = +54; signal line is +53
5/7/17; 7:00 PM EST = +70; signal line is +53
5/5/17; 9:00 AM EST = +70; signal line is +52
5/2/17; 9:36 AM EST = +70; signal line is +52
5/1/17; 9:36 AM EST = +86; signal line is +52
4/30/17; 7:00 PM EST EOM = +54; signal line is +50
4/28/17; 3:53 AM EST = +54; signal line is +50
4/28/17; 10:00 AM EST = +70; signal line is +50
4/25/17; 10:00 AM EST = +70; signal line is +49
4/24/17; 3:07 PM EST = +70; signal line is +48; go long 2376; (Benchmark SPX for 2017 = +6.1%)(Keybot algo this trade = -0.8%; Keybot algo for 2017 = -0.1%)(Actual results this trade = -1.6%; Actual results for 2017 = -4.5%)

Tuesday, May 16, 2017

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

Keybot the Quant remains long. The algo prints one number to begin the week yesterday confirming the bull strength in stocks. Keybot also prints a number this morning before the opening bell which was a pre-scheduled number for this week. Note how the bulls and bears are battling with both the algo number and signal line number at +54 from late last week through Sunday.

Financials rally yesterday slapping the bears in the face. Slap, slap. Market bears need XLF under 23.61 and if this occurs, along with the SPX moving under 2394, Keybot would likely flip short. Bears would also benefit from VIX above 11.75.

Bulls benefit from XLF remaining above 23.61 and VIX under 11.75. Bulls will prove that more upside is on the way if they boost commodities and copper. GTX would need to move above 2286 and/or JJC above 29.43; either would confirm that the stock market will explode higher.

If the banks fail as explained above, stocks will  crumble lower. XLF is currently printing at 23.76 which is 15 pennies above the critical bull-bear line in the sand.

5/21/17; 7:00 PM EST =
5/16/17; 9:00 AM EST = +70; signal line is +56
5/15/17; 9:36 AM EST = +70; signal line is +55
5/14/17; 7:00 PM EST = +54; signal line is +54 but algorithm remains long
5/12/17; 10:00 AM EST = +54; signal line is +54 but algorithm remains long
5/12/17; 9:36 AM EST = +54; signal line is +54 but algorithm remains long
5/11/17; 11:13 AM EST = +70; signal line is +54

Friday, May 12, 2017

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

Keybot the Quant remains long during a sleepy week. The algo did not print any numbers until yesterday. Keybot prints a pre-scheduled number shortly after the opening bell this morning.

The drama with financials continue; the algo identifies the banks as the most important parameter currently impacting stock market direction. The bears need to push XLF under 23.61 to verify that selling in the stock market is at hand. Price is at 23.66 only a nickel away. Bulls must push the banks higher to remain in control of the markets. If XLF drops under 23.61, and the SPX drops under 2382, Keybot will likely flip short, hence the imminent turn notation in the title line above.

If the VIX moves above 11.95 (now at 10.60), you will see accelerated downside selling in the stock market. Bulls will be able to recover after any selloff in equities as long as they prevent the VIX from moving above 11.95. Bulls will receive upside strength if they push commodities higher. Bulls need to push GTX above 2290 now at 2214.

The beat goes on. Watch XLF 23.61 to see if it fails, if so, stocks will be trending lower. If VIX moves above 11.95, the bottom will fall out in the stock market.

5/14/17; 7:00 PM EST =
5/12/17; 10:00 AM EST =
5/11/17; 11:13 AM EST = +70; signal line is +54
5/11/17; 10:23 AM EST = +54; signal line is +53
5/7/17; 7:00 PM EST = +70; signal line is +53

Sunday, May 7, 2017

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the sideways move through SPX 2330-2400 continues for the last three months. The S&P 500 is at 2399 testing the upper boundary of this sideways channel. The algo number is comfortably 17 points above the signal line.

The bulls need stronger copper and commodities to drive the stock market higher. The bears need lower financials and higher volatility to send stocks lower. Banks are key. Watch XLF 23.58 the top parameter the algo is currently tracking. XLF is at 23.84 on the bull side which creates upside strength in the stock market. Stocks will turn quickly sour if XLF falls under 23.58.

The algo likely needs both XLF under 23.84 and VIX above 12.00 to flip short, however, if XLF comes down to the critical 23.58-ish level, and jogs above and below for a few hours, that may be enough to flip the model short once XLF would fail from 23.58.

Pay attention to XLF 23.58 and VIX 12.00 to gauge broad stock market direction to begin the new week of trading. Copper is important. Keybot prints one pre-scheduled number this week on Friday morning.

5/14/17; 7:00 PM EST =
5/12/17; 10:00 AM EST =
5/7/17; 7:00 PM EST = +70; signal line is +53
5/5/17; 9:00 AM EST = +70; signal line is +52
5/2/17; 9:36 AM EST = +70; signal line is +52
5/1/17; 9:36 AM EST = +86; signal line is +52

April Publication of the Daily Chronology of Global Markets and World Economics 2017-04 is Available from Amazon; COMPQ, NDX and RUT All-Time Highs; COMPQ (Nasdaq Composite) Tags 6,000; Bitcoin Record Highs; Germany’s DAX 12,500; India’s BSE Sensex 30,000; Paltry 98K Jobs Report; Bank Earnings GS Disappoints; North Korea Turmoil; Article 50 Begins Brexit Process; Macron Likely Next President of France

The April Publication of the Daily Chronology of Global Markets and WorldEconomics 2017-04 is available through Amazon. The epic market action continues with more all-time stock market highs in the major indexes. The one-half of the United States that own stocks are joyous day after day while the other half of the United States struggles through eight years of high unemployment and debt. The gap between rich and poor in America is the widest in five decades. The United States is experiencing a gilded age (created by the Federal Reserve and other global central bankers); a society of the have’s and the have not’s.

April Cover Highlights;
COMPQ, NDX AND RUT ALL-TIME HIGHS
COMPQ (NASDAQ COMPOSITE) TAGS 6,000
BITCOIN RECORD HIGHS
GERMANY’S DAX 12,500
INDIA’S BSE SENSEX 30,000
PALTRY 98K JOBS REPORT
BANK EARNINGS GS DISAPPOINTS
NORTH KOREA TURMOIL
ARTICLE 50 BEGINS BREXIT PROCESS
MACRON LIKELY NEXT PRESIDENT OF FRANCE

The chronology explains the activity in global stock, bond and currency markets to key geopolitical events, central banker monetary policies and economic data releases. If you are trying to make sense of the markets this is the resource for you. No other publication exists where the stock, bond and currency moves are detailed and explained as world events take place in real-time.

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As always, all monthly publications of the Daily Chronology of GlobalMarkets and World Economics are available from the links in the margins of the K E Stone blog sites or simply searching on Amazon or Google. The monthly publication contains updated information not posted on the Keystone the Scribe web site as well as clarifications, edits and refinements to the ongoing daily blog text.

The May 2017-05 chronology is tentatively set for publishing by Amazon on Saturday, 6/3/17.

Wednesday, May 3, 2017

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long. Bulls need higher commodities, GTX above 2306, to prove that the stock market will continue higher. Bears benefit from lower copper, lower banks and higher volatility. Bears need JJC under 29.75, or XLF under 23.56 or VIX above 12. Copper is tanking this morning and JJC should slip below 29.75, if so, that places a lid on the stock market upside.

The bears will likely also need XLF under 23.56, weaker banks, and SPX below 2386, to cause Keybot to flip to the short side. Bulls will be okay as long as they do not allow banks or volatility to turn bearish.

5/5/17; 9:00 AM EST =
5/1/17; 9:36 AM EST = +86; signal line is +52
4/30/17; 7:00 PM EST EOM = +54; signal line is +50
4/28/17; 3:53 AM EST = +54; signal line is +50
4/28/17; 10:00 AM EST = +70; signal line is +50
4/25/17; 10:00 AM EST = +70; signal line is +49