Sunday, February 19, 2017

STOCK MARKET BULLISH -- LONG

Keybot the Quant will begin the new week of trading on Tuesday on the long side. US markets are closed on Monday in observance of Presidents Day holiday. The algo remains pegged at the historic +100 level. The epic loftiness in the stock market continues.

Market bears need one of three things to happen to stop the upside move in stocks; either UTIL under 666.65 (now at 672), GTX under 2364 (now at 2393) and/or VIX above 13.16 (now at 11.49). If all three remain bullish, stocks will keep floating along sideways with an upward bias.

For the SPX starting on Tuesday at 2351, the bulls need any smidge of positivity in the S&P futures and the S&P 500 will rally several handles higher. The bears need to push below 2340 to regain their mojo. A move through 2341-2350 is sideways action to begin the US trading this week on Tuesday. Keybot prints one pre-scheduled number this week on Friday morning.

The bulls remain in control. If any one of the three parameters in the second paragraph turn bearish, consider the caution flag out. If 2 of the 3 turn bearish, the imminent turn notation will be in play. If 2 of the 3 parameters turn bearish, and the SPX drops below 2340 on Tuesday, Keybot will likely flip short.

2/26/17; 7:00 PM EST =
2/24/17; 10:00 AM EST =
2/19/17; 7:00 PM EST = +100 signal line is +79
2/16/17; 9:53 AM EST = +100 signal line is +78

Friday, February 17, 2017

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long. The algo printed one number on Wednesday, then the pre-scheduled number and one more number yesterday, and is now at +100 again. Sound the seven trumpets. Stocks are locked in for the bulls.

The market bears likely need UTIL under 666.63 (now at 670.89), GTX under 2364 (now at 2397) and/or VIX above 13.17 (now at 12.03). Any parameter turning bearish will stop the upside stock market rally and require the caution flag. If 2 of the 3 parameters turn bearish, Keybot will likely flip short. The bulls are in charge. That UTIL 666.63 level is extremely important going forward.The beat goes on. 

2/19/17; 7:00 PM EST =
2/16/17; 9:53 AM EST = +100 signal line is +78
2/16/17; 9:00 AM EST = +84 signal line is +76
2/15/17; 9:36 AM EST = +84 signal line is +75
2/14/17; 3:30 PM EST = +100 signal line is +75

Tuesday, February 14, 2017

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long and the epic market action continues. Stocks are printing more all-time record highs. The bulls are running. The algo did not print any numbers on Monday but was active today printing four numbers. Keybot remains at the maximum possible +100 reading. Something extremely special is occurring in the markets.

The drama with utilities continues. If UTIL drops under 666.63, now at 667.37, the upside rally in stocks will stall. If UTIL remains above 666.63, the bulls will keep printing more all-time highs.

For the SPX starting hump day at 2338, the bulls need any smidge of green in the overnight S&P futures and the stock market will run strongly higher after the opening bell. The bears need to push under 2321 to regain their mojo. A move through 2322-2337 is sideways action. The beat goes on.

2/19/17; 7:00 PM EST =
2/16/17; 9:00 AM EST =
2/14/17; 3:30 PM EST = +100 signal line is +75
2/14/17; 2:40 PM EST = +84 signal line is +75
2/14/17; 2:11 PM EST = +100 signal line is +76
2/14/17; 10:09 AM EST = +84 signal line is +75
2/12/17; 7:00 PM EST = +100 signal line is +75

Sunday, February 12, 2017

Keybot the Quant and SPX S&P 500 Charts


The importance of the Keybot the Quant's +100 ticks cannot be ignored. At its heart, the Keybot the Quant algorithm is an oscillator with +100 as the maximum level and -100 the minimum level. As with all oscillators, such as an RSI, or stochastics, the +70 to +100 levels indicate a stock market that is becoming or has already become overbot in need of a pullback. Conversely, the -70 to -100 levels indicate a stock market that is becoming or has become oversold and in need of a rally. The uber maximum +100 hints that a multi-year top may be printing in real-time over the coming days and weeks.

The red circles highlight the bottoms that the quant identifies as important corresponding to the lows in the market. The green circles show the tops in the quant's readings and in the stock market.


The future is unknown. Keybot only sees the 1's and 0's in real-time. The quant did not begin operating in sync with the SPX until late 2008 so the peak in the stock market top in October 2007 is not part of the quant's historical data set. An assumption can be made that Keybot was likely printing +100 numbers in June-October 2007 but this can only be verified through back testing and that is too time-consuming to fool with right now.


These are not your grandfather's markets. The Federal Reserve prevented the stock market from correcting properly in early 2009 and has pumped stocks higher ever since. Global central bankers are now acting in collusion to keep the party going. The ECB continues to print money like madmen and will continue their QE (quantitative easing) program through this year, however, the ECB is tapering the monthly asset purchases, the life-blood of markets for eight years, from March to April and these reduced monthly purchases continue through year-end. The +100 numbers indicate that a potential epic multi-year top for stocks may coincide with the ECB tapering its monthly purchases. The central bankers are running out of bullets to fight any future economic problems as the months play out. 

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long moving into the new week of trading. The algo is pinned to the maximum +100 possible level verifying the ongoing historic bullishness in the stock market. The multiple prints of +100 may be indicating that an epic multi-month and/or multi-year stock market top may be occurring as the weeks play out.

All of the quant's parameters are blown out to the upside producing the +100 historic reading. The only way the market bears can stall the upside in equities is to push UTIL back under 666 (now at 669.68). Weaker retail stocks would also help the bears if they can push RTH under 76.57 but it begins the week at a lofty 77.99. The bulls are drinking champagne without any worries in the world. Every day is a euphoric bullish party.

For the SPX starting at 2316, the bulls need to push above 2319 and bingo, price will be in the mid-2320's in a flash. The bears need to push below 2311 to accelerate the downside. A move through 2312-2318 is sideways action for Monday.

Keybot prints one pre-scheduled number this week on Friday morning. The bulls are in control with the algo number 25 points above the signal line but the +100 represents a maximum overbot condition for the stock market. There will likely be lots of drama around the UTIL 666 level as the bulls and bears duke it out. Bears desperately need UTIL back under 666, otherwise, stocks may remain lofty for several weeks ahead.

2/19/17; 7:00 PM EST =
2/16/17; 9:00 AM EST =
2/12/17; 7:00 PM EST = +100 signal line is +75
2/10/17; 10:28 AM EST = +100 signal line is +74

Friday, February 10, 2017

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long. The bulls are running higher with the algo pegging the maximum +100 once again. Keybot prints the pre-scheduled number and one more this morning. Bulls are in firm control with the algo number 26 points above the signal line.

There is a battle at UTIL 666 and the bulls are winning with price at 667. Market bears will be slapped around all day long if UTIL remains above 666. The bulls appear unstoppable.

2/12/17; 7:00 PM EST =
2/10/17; 10:28 AM EST = +100 signal line is +74
2/10/17; 10:00 AM EST = +84 signal line is +72
2/9/17; 11:31 AM EST = +84 signal line is +71

Thursday, February 9, 2017

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is on the long side going into the Friday session. Utilities are key. UTIL begins at 665. Market bulls need UTIL above 666 and the stock market will continue printing more record highs. The bears need to send UTIL under 662 to create downside action in the stock market, however, that party may not continue long since as of 4 PM EST when the closing bell rings for the week, the UTIL 662 number becomes meaningless and is replaced with 653.27 which is important for all of next week.

Thus, if UTIL ventures down towards 662, stocks will be selling off but this action will only cause negativity if UTIL keeps dropping like a rock on Friday towards the 653 number. Utes move lower when yields and rates move higher. This is because utility companies are always involved in very large and expensive projects and they are very exposed to interest rate changes. So for UTIL to drop, Treasury yields would have to be rising (bonds selling off).

Bears can benefit from RTH under 76.53, GTX under 2354 and/or XLF under 23.10 but retail stocks, commodities and financials all appear strong. Watch UTIL 666 there will be likely lots of drama around this level over the coming days.

For Friday with the SPX starting at 2307, the bulls will run strongly higher if they push above 2311. If UTIL is above 666 and SPX above 2311, stocks will run strongly higher. The bears need to push the SPX under 2297 to regain their mojo. A move through 2298-2310 is sideways action to end the week. Keybot prints a pre-scheduled number at 10 AM. Bulls are in control as markets continue chopping along. 

2/12/17; 7:00 PM EST =
2/10/17; 10:00 AM EST =
2/9/17; 11:31 AM EST = +84 signal line is +71

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is back on the long side. Stocks are trailing steadily higher all day long. An adjustment was made to the data entries below that has no impact on results; it is to correct an internal conflict and keep the model in sync. The algo number retreats off the +100 level to +84 due to the drop in utilities. The bulls will continue the upside by sending UTIL back above 666 (now at 663.66). Otherwise, stocks will likely stall. Retail stocks are strongly higher so everything is going the bull's way. The bears can growl if UTIL falls under 662 but momentum is clearly in the bull's camp.

The S&P 500 (SPX) prints a new all-time record high at 2309.63.

For all of next week, the key levels for UTIL are 665.90-666.00 and 653.27. You can see that the bulls need to push UTIL under 653-ish by the end of trading tomorrow (which is where next week will begin) which is a tall task. The UTIL 665.90-666.00 level is the most important number dictating broad stock market direction now and perhaps the next day or three. This level is very important in dictating the move for the stock market over the intermediate term (weeks and months).

For the last trade, the Keybot program and actual trading both lose -0.5%. The benchmark S&P 500 is up +2.4% this year a healthy gain for six weeks. The Keybot model program is down -3.3% so far this year and the actual trading is down nearly -7%. The choppy sideways slop continues creating losses this year but the model should right the ship as time plays out. Keybot exited SH and entered SPY and remains in the single ETF's due to the sideways whipsaw action.

The upside rally will stall with UTIL under 666. If UTIL moves above 666, the  rally will continue higher. Bears need UTIL under 662 today or tomorrow to create negativity in stocks. If UTIL would fall under 662, and say price continues to trail lower under 660 and perhaps tomorrow under 658 and under 656, towards 653, that will tell you that the stock market breakout is likely a false move higher.

If utes move higher, than the stock market will likely remain buoyant for several days printing more new record highs. At the conclusion of writing this message, UTIL is currently printing at 664.14. Semiconductors may play a key role in broad stock market direction in the days ahead. In these choppy sideways markets, expect anything.

2/12/17; 7:00 PM EST =
2/10/17; 10:00 AM EST =
2/9/17; 11:31 AM EST = +84 signal line is +71
2/8/17; 11:15 AM EST = +100; signal line is +71; go long 2293; (Benchmark SPX for 2017 = +2.4%)(Keybot algo this trade = -0.5%; Keybot algo for 2017 = -3.3%)(Actual results this trade = -0.5%; Actual results for 2017 = -6.8%)
2/8/17; 9:47 AM EST = +84; signal line is +70 but algorithm remains short
2/7/17; 2:09 PM EST = +68; signal line is +69
2/7/17; 1:58 PM EST = +52; signal line is +70
2/7/17; 1:17 PM EST = +68; signal line is +71
2/6/17; 1:45 PM EST = +52; signal line is +71
2/6/17; 12:31 PM EST = +68; signal line is +72
2/6/17; 11:25 AM EST = +52; signal line is +72
2/6/17; 11:18 AM EST = +68; signal line is +73
2/6/17; 9:53 AM EST = +52; signal line is +73
2/5/17; 7:00 PM EST = +68; signal line is +74
2/3/17; 12:58 PM EST = +68; signal line is +74
2/3/17; 11:28 AM EST = +84; signal line is +75 but algorithm remains short
2/3/17; 9:00 AM EST = +68; signal line is +74
2/2/17; 1:39 PM EST = +68; signal line is +75
2/2/17; 10:51 AM EST = +84; signal line is +76 but algorithm remains short
2/1/17; 12:59 PM EST = +68; signal line is +77
2/1/17; 12:48 PM EST = +52; signal line is +77
2/1/17; 9:39 AM EST = +68; signal line is +79
2/1/17; 9:36 AM EST = +84; signal line is +79 but algorithm remains short
1/31/17; 7:00 PM EST EOM = +100; signal line is +80 but algorithm remains short
1/31/17; 3:27 PM EST = +100; signal line is +79 but algorithm remains short
1/31/17; 11:07 AM EST = +84; signal line is +79 but algorithm remains short
1/31/17; 10:00 AM EST = +68; signal line is +81
1/30/17; 2:06 PM EST = +68; signal line is +81
1/30/17; 1:34 PM EST = +52; signal line is +81
1/30/17; 9:35 AM EST = +68; signal line is +82; go short 2282; (Benchmark SPX for 2017 = +1.9%)(Keybot algo this trade = +0.4%; Keybot algo for 2017 = -2.6%)(Actual results this trade = +0.5%; Actual results for 2017 = -6.3%)

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

Keybot the Quant remains short moving into the Thursday session but the quant is champing at the bit to go long. The algo prints two numbers on Wednesday. Sound the seven trumpets. The algo number tags +100 the maximum possible reading. Interestingly, the model prints the +100 but the SPX traded negative for most of the Wednesday session. This is extremely odd price action. A +100 event is a very rare occurrence but over the last few months the model keep tagging this epic level.

If the SPX moves above 2296, Keybot will likely flip long. If a gap-up move occurs at the opening bell, a timer may be triggered forcing Keybot to hold off on the move to the long side for 90 minutes. The best thing for market bulls is to see the S&P 500 move slowly and steadily higher which will likely flip the model to the long side. S&P futures are trading flat to +1 about five hours before the opening bell.

The parameters are in place to send the stock market higher. The bears can stall the move if either UTIL drops under 666 (now at 670), or, if RTH drops under 76.53 (now at 77.00). If these two parameters remain bullish, stocks are going to keep floating higher. Bears need weaker utes and retail stocks.

For the SPX starting at 2295, the bulls need to push above 2296, only one point higher, and the upside will quickly accelerate several handles to 2300 and higher. The bears need to push below 2285 to get their mojo back. A move through 2286-2295 is sideways action for Thursday. The bulls have it on a silver platter if they want it.

2/12/17; 7:00 PM EST =
2/10/17; 10:00 AM EST =
2/8/17; 11:15 AM EST = +100 signal line is +71 but algorithm remains short
2/8/17; 9:47 AM EST = +84; signal line is +70 but algorithm remains short
2/7/17; 2:09 PM EST = +68; signal line is +69

Tuesday, February 7, 2017

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

Keybot the Quant remains short as the sideways choppy slop continues. Markets remain a crap shoot. The algo number is only one measly point under the signal line clearly illustrating that a knock-down, drag-out bull-bear battle continues. Flip a coin.

The algo identifies retail stocks, utes and commodities as the three key areas most impacting stock market price direction currently. The bears need UTIL under 662 (now at 663) and/or GTX under 2354 (now at 2372). If either parameter fails, the bears are in good shape and the stock market will begin trailing lower.

The bulls need UTIL above 666 (now at 663) and/or RTH above 76.52 (now at 76.29) to prove that up is the direction ahead for the stock market. If one of the two parameters turns bullish, and the SPX moves above 2299, Keybot will likely flip long, hence the imminent turn notation is in play.

For the SPX starting at 2293, the bulls need to push above 2299 and bingo, the S&P 500 will run firmly above 2300 in a heartbeat. The bears need to push under 2290 to accelerate the downside. A move through 2291-2298 is sideways action.

Bulls need higher retail stocks and utilities. Bears need lower utilities and commodities. RTH 76.52, UTIL 666, UTIL 662 and SPX 2299 will tell the stock market direction story for hump day.

2/12/17; 7:00 PM EST =
2/10/17; 10:00 AM EST =
2/7/17; 2:09 PM EST = +68; signal line is +69
2/7/17; 1:58 PM EST = +52; signal line is +70
2/7/17; 1:17 PM EST = +68; signal line is +71
2/6/17; 1:45 PM EST = +52; signal line is +71