Sunday, August 18, 2019

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is on the long side as stocks continue whipsawing back and forth in epic price behavior. The algo number is 14 points above the signal line so the bulls are in control.

Bulls will continue rallying equities higher unless the bears can send either NYA below 12532 (now at 12580) or SOX below 1473 (now at 1479). Since both parameters are only a few dollars from their bull-bear lines in the sand, the NYSE Composite and chips will tell the stock market direction story going forward. If either parameter flips into the bear camp, the algo will be in the imminent turn (to the downside) status. If NYA or SOX turn bearish, either one would do, and the SPX drops below 2865, Keybot will likely flip back to the short side.

Keybot does not print any pre-scheduled numbers this week so stocks are at the mercy of news bites, economic data and the remaining earnings reports. Obviously the president's tweets and the US-China trade war rhetoric, on both sides, is sending the stock market to and fro and maintaining the historically erratic and unstable price behavior.

8/25/19; 7:00 PM EST =
8/18/19; 7:00 PM EST = +12; signal line is -2
8/16/19; 10:57 AM EST = +12; signal line is -2; go long 2888; (Benchmark SPX for 2019 = +15.2%)(Keybot algorithm program this trade = -0.3%; Keybot algo for 2019 = +11.0%)(Actual results this trade = -0.4%; Actual trading results for 2019 = +22.7%)

Saturday, August 17, 2019

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips to the long side at SPX 2888. The erratic whippy stock market price behavior continues. Keybot has flipped direction five times in the last 7 trading days which is unprecedented activity never seen in the over one-decade history of the algorithm. This behavior verifies the ongoing erratic and unstable nature of the stock market.

The bulls are in charge with the algo number 14 points above the signal line. The chips create lots of strength in the stock market on Friday; the SOX pops above 1472. The NYA index moves above 12532 so boom, equities took off higher. The wild and historic price action continues.

On the last trade, that lasted only two days, the Keybot program and the actual trading each log marginal losses. The SPX benchmark is up +15% this year. The actual trading generated by Keybot is up +23% this year. Keybot exits SH and enters IWM. The erratic whipsaw markets in August keep chewing up the trading gains this year. Algo's obviously prefer trending markets.

8/18/19; 7:00 PM EST =
8/16/19; 10:57 AM EST = +12; signal line is -2; go long 2888; (Benchmark SPX for 2019 = +15.2%)(Keybot algorithm program this trade = -0.3%; Keybot algo for 2019 = +11.0%)(Actual results this trade = -0.4%; Actual trading results for 2019 = +22.7%)
8/16/19; 10:52 AM EST = +12; signal line is -3 but algorithm remains short
8/16/19; 10:47 AM EST = -4; signal line is -4 but algorithm remains short
8/16/19; 10:00 AM EST = -18; signal line is -3
8/16/19; 9:00 AM EST = -18; signal line is -2
8/14/19; 9:48 AM EST = -18; signal line is -1; go short 2879; (Benchmark SPX for 2019 = +14.8%)(Keybot algorithm program this trade = -2.2%; Keybot algo for 2019 = +11.3%)(Actual results this trade = -2.2%; Actual trading results for 2019 = +23.1%)

Thursday, August 15, 2019

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is short with the algo 17 points below the signal line. The quant motors along today without printing any numbers. SPX did not breach the 2806 bull-bear line in the sand so the bears were sad and bulls happy. NYA did not punch up through the 12529 bull-bear line in the sand so the bulls were sad and the bears happy. Since neither parameter flinched, the stock market sputtered along chopping above and below the flat line and finished flat.

Same-o set-up for Friday. Watch SPX 2806 and NYA 12529 to determine the path ahead. Stronger chips, the SOX above 1472, would greatly help the bulls.

Housing Starts hit at 8:30 AM EST and Consumer Sentiment is at 10 AM EST Friday morning. The importance of Starts cannot be overstated. As you remember, the quant considers the housing market to have now slipped into a recession going forward so the Starts and Permits data are bigtime important going forward.

If either NYA moves above 12529 and/or SOX above 1472, consider the imminent turn to the long side to be in play. If both turn bullish, the stock market will be catapulting higher. Armageddon occurs if the SPX loses 2806 (the S&P 500 fell to 2825 today only 19 points from the cliff edge). The erratic and unstable price behavior continues.

8/18/19; 7:00 PM EST =
8/16/19; 10:00 AM EST =
8/16/19; 9:00 AM EST =
8/14/19; 9:48 AM EST = -18; signal line is -1; go short 2879; (Benchmark SPX for 2019 = +14.8%)(Keybot algorithm program this trade = -2.2%; Keybot algo for 2019 = +11.3%)(Actual results this trade = -2.2%; Actual trading results for 2019 = +23.1%)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side from yesterday morning at SPX 2879. Craziness. That sums up the stock market nowadays. It's no surprise since the price action has been erratic and unstable. What is a surprise are the whipsaws. Keybot flipped long on 8/8/19 but then whipsawed back to the short side on 8/12/19 then whipsawed back to the long side on 8/13/19 then whipsawed back to the short side yesterday. The price action is historic.

To put it in perspective, after operating for over one decade, the Keybot the Quant algorithm may print a whipsaw a couple times on average each year. The three whipsaw moves below can be deemed whipsaws when discussing them at the water cooler but the quant technically defines a whipsaw if the reversal occurs within about 10 hours time. So Keybot did not consider the move from 8/8 to 8/12 or the move from 8/12 to 8/13 as a whipsaw but the move from 8/13 to 8/14 is a whipsaw, by the quant's definition. This automatically sends Keybot the Quant into single 1x ETF's for the next 35 days. Choppy sideways markets chew up both bulls and bears and especially positions in leveraged ETF's. This activity shows you why you do not want to be in those dangerous and flawed 3x ETF and ETN instruments.

The Keybot moves are self explanatory below. Keybot was in SSO on 8/8 then flipped into SDS on 8/12 then to SPY (1x ETF) on 8/13 and then into SH (1x ETF) on 8/14. Keybot will remain in single ETF's until 9/16/19 as long as no other whipsaws occur.

But continuing the point from above, Keybot may have 2 or 3 whipsaws a year and this is just a simple reversal after it flips in one of the directions. The moves this week are unprecedented flipping from long to short, back to long then back to short in only 3 days; a unique and rare triple-whipsaw. Keybot has never printed anything even close to this in all its history. Interestingly, the quant was printing maximum +100 numbers (representing maximum market euphoria) in mid-July only one month ago.

For the year, the benchmark S&P 500 is up +14.8%. The Keybot algorthm program is up +11.3%. The actual trading generated by Keybot is up +23.1% taking a haircut from the 30%+ levels because of the choppy, whippy markets. Any losses from further whipsaws are minimized by the quant now being in the 1x non-leveraged ETF's.

Now that the market mayhem is caught up to the present time, the VIX is at 23.14 and S&P futures are -5 three hours before the opening bell for the regular Thursday trading session in the States. S&P futures have dropped almost 30 handles over the last hour after the US-China trade war is escalated by the communists saying they will retaliate against President Trump's tariffs.

The NYA failed yesterday at 12528 which ushers in a cyclical (weeks and many months ahead) bear market. Watch this closely. Bulls must move NYA above 12528 as soon as possible to stop the market carnage. If stocks perform a rebound rally today, watch the NYA since it will tell you if the rally is real, or not.

The bears need weakness in utilities and the SPX index to prove they can crash the markets. Watch SPX 2806 very closely. The S&P 500 dropped to 2835 yesterday and 2822 last week only 16 points from this Armageddon line in the sand. If the SPX loses 2806, all hope for bulls is lost and the stock market is guaranteed to be in a cyclical bear market pattern for weeks and months ahead. If stocks sell off, as futures indicate, and weakness in equities is persistent, but the SPX does not lose the 2806 level, the bulls will recover going forward.

If utilities develop a downward trend from here, it will mean serious trouble for equities. If utilities bounce over the coming days, the bulls likely have a chance at steadying the stock market ship.

Bulls need NYA above 12528. Bears need SPX below 2806. One of them will flinch going forward and tell you the stock market direction ahead. If stocks keep chopping along and the NYA remains bearish and the SPX in the bull camp, equities will maintain in a sideways to sideways lower bias.

Keybot prints two pre-scheduled numbers tomorrow morning. Anything can happen in these erratic and unstable markets controlled by President Tweet and central banker largess. The bears are in control with the algo number 17 points below the signal line. The beat goes on.

9/6/19; 9:00 AM EST =
9/1/19; 7:00 PM EST EOM =
8/30/19; 10:00 AM EST =
8/27/19; 10:00 AM EST =
8/25/19; 7:00 PM EST =
8/18/19; 7:00 PM EST =
8/16/19; 10:00 AM EST =
8/16/19; 9:00 AM EST =
8/14/19; 9:48 AM EST = -18; signal line is -1; go short 2879; (Benchmark SPX for 2019 = +14.8%)(Keybot algorithm program this trade = -2.2%; Keybot algo for 2019 = +11.3%)(Actual results this trade = -2.2%; Actual trading results for 2019 = +23.1%)
8/14/19; 9:36 AM EST = -4; signal line is 0 but algorithm remains long
8/13/19; 12:15 PM EST = +12; signal line is +1
8/13/19; 10:05 AM EST = +28; signal line is +3 but algorithm remains short
8/13/19; 9:54 AM EST = +12; signal line is +4 but algorithm remains short
8/12/19; 11:14 AM EST = -4; signal line is +5; go short 2889; (Benchmark SPX for 2019 = +15.2%)(Keybot algorithm program this trade = -1.2%; Keybot algo for 2019 = +15.4%)(Actual results this trade = -2.4%; Actual trading results for 2019 = +28.4%)
8/11/19; 7:00 PM EST = -4; signal line is +8 but algorithm remains long
8/9/19; 9:47 AM EST = -4; signal line is +9 but algorithm remains long
8/8/19; 11:40 AM EST = +12; signal line is +11; go long 2924; (Benchmark SPX for 2019 = +16.6%)(Keybot algorithm program this trade = +1.8%; Keybot algo for 2019 = +16.6%)(Actual results this trade = +3.4%; Actual trading results for 2019 = +30.8%)

Sunday, August 11, 2019

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

Keybot the Quant remains long but is champing at the bit to go short with the algo number 12 points below the signal line. The internal parameters will not fully latch as yet to permit the move. The semiconductors stumble out of the gate on Friday creating stock market negativity. The imminent turn is in play and the quant will likely flip short if the SPX loses the 2900 level.

The battle for market direction is between chips and the NYA index. Bulls need the SOX back above 1478.20 to prove that up is the direction ahead. Bears need the NYA Index to drop below 12531 to prove that down is the direction ahead. One of them will flinch. If chips remain bearish and the NYA bullish, stocks will chop along sideways with a slight downward bias.

Keybot prints two pre-scheduled numbers this week both on Friday morning. You can use VIX 17.17 as a market rudder. VIX above 17.17 creates market mayhem while VIX below 17.17 stops the selling and creates market stability for the bulls.

8/18/19; 7:00 PM EST =
8/16/19; 10:00 AM EST =
8/16/19; 9:00 AM EST =
8/11/19; 7:00 PM EST = -4; signal line is +8 but algorithm remains long
8/9/19; 9:47 AM EST = -4; signal line is +9 but algorithm remains long
8/8/19; 11:40 AM EST = +12; signal line is +11; go long 2924; (Benchmark SPX for 2019 = +16.6%)(Keybot algorithm program this trade = +1.8%; Keybot algo for 2019 = +16.6%)(Actual results this trade = +3.4%; Actual trading results for 2019 = +30.8%)

Thursday, August 8, 2019

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

Keybot the Quant flips to the bull side today at SPX 2924 before munch time. The bulls win the day with bullish semiconductors and during the last half-hour of trading the VIX falls through the 200-day MA at 17.18 pumping stocks higher.

The chips matter. Bears must push the SOX below 1478.25 (now at 1491.26) to regain control of the stock market direction. Bulls remain in the driver's seat as long as the SOX remains bullish above 1478.25.

The bulls will verify further upside strength in stocks if either RTH moves above 109.44, XLF above 27.65 and/or VIX below 14.55. It will be a sign of market weakness if none of the three can flip bullish in the Friday trade.

The model may whipsaw back to the short side in these erratic and unstable markets so the caution flag and imminent turn notations are in the title line. Friday may be a wild and crazy day. The bulls are in control but that will immediately disappear if the bears push SOX below 1478.25. Listen for any news on the chips overnight which will push SOX one way or the other.

The algo number is only 2 points above the signal line favoring the bulls but these readings indicate that the stock market is a coin flip.

On the last trade, which lasted two weeks, the Keybot program gains +1.8% and the actual trading gains +3.4%. Keybot exits SDS and enters SSO remaining in the 2x ETF's. Interestingly, the SPX benchmark index and the Keybot the Quant algorithm program are both up exactly +16.6% after 7 months of trading in 2019. The actual trading generated by Keybot is up +31% on the year thus far outperforming the vast majority of Wall Street.

Watch VIX 17.18. VIX begins trading at 3 AM EST so it will give you a heads-up for the Friday trade. If VIX is above 17.18, stocks will be in retreat on Friday. If the SOX turns bearish, stocks will fall apart. If VIX is above 17.18, but the SOX remains bullish above 1478.25, the chips will likely win and stocks will remain buoyant.

If VIX is below 17.18, stocks will be in a happy mood into the weekend. If VIX is below 17.18 and the chips remain bullish, stocks will rally strongly into the weekend. Of course, if the retail stocks or banks turn bullish, or volatility bullish, as described above, the bulls will be in clover. It's not rocket science. The beat goes on.

8/11/19; 7:00 PM EST =
8/8/19; 11:40 AM EST = +12; signal line is +11; go long 2924; (Benchmark SPX for 2019 = +16.6%)(Keybot algorithm program this trade = +1.8%; Keybot algo for 2019 = +16.6%)(Actual results this trade = +3.4%; Actual trading results for 2019 = +30.8%)
8/8/19; 11:31 AM EST = -4; signal line is +12
8/8/19; 11:14 AM EST = +12; signal line is +14
8/7/19; 12:45 PM EST = -4; signal line is +16
8/7/19; 11:47 AM EST = -18; signal line is +19
8/7/19; 10:53 AM EST = -4; signal line is +21
8/7/19; 9:37 AM EST = -18; signal line is +24
8/6/19; 1:05 PM EST = -4; signal line is +27
8/6/19; 12:53 PM EST = -18; signal line is +29
8/6/19; 11:53 AM EST = -4; signal line is +32
8/6/19; 11:16 AM EST = -18; signal line is +35
8/6/19; 9:36 AM EST = -4; signal line is +37
8/5/19; 1:50 PM EST = -18; signal line is +40
8/5/19; 1:12 PM EST = -4; signal line is +44
8/5/19; 1:00 PM EST = -18; signal line is +47
8/5/19; 9:36 AM EST = -4; signal line is +49
8/4/19; 7:00 PM EST = +12; signal line is +52
8/2/19; 10:00 AM EST = +12; signal line is +54
8/2/19; 9:00 AM EST = +12; signal line is +56
8/1/19; 2:26 PM EST = +12; signal line is +58
8/1/19; 1:41 PM EST = +28; signal line is +60
8/1/19; 1:33 PM EST = +44; signal line is +61
8/1/19; 10:33 AM EST = +58; signal line is +62
8/1/19; 9:36 AM EST = +44; signal line is +62
7/31/19; 7:00 PM EST EOM = +58; signal line is +63
7/31/19; 3:32 PM EST = +58; signal line is +64
7/31/19; 3:06 PM EST = +44; signal line is +64
7/31/19; 2:55 PM EST = +28; signal line is +65
7/31/19; 2:51 PM EST = +44; signal line is +67; go short 2976; (Benchmark SPX for 2019 = +18.7%)(Keybot algorithm program this trade = -1.1%; Keybot algo for 2019 = +14.8%)(Actual results this trade = -2.0%; Actual trading results for 2019 = +27.4%)

Wednesday, August 7, 2019

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short as the market turmoil continues. Chips and banks failed out of the gate this week so the stock market collapsed. A relief rally occurs on Tuesday but the bears remain in control with the algo number 31 points below the signal line. Keybot is active this week printing 9 numbers during the first 2 sessions.

The bulls need stronger chips, banks and retail stocks to stop the market carnage. Bulls need SOX above 1474 (now at 1442) and XLF above 27.63 (now at 27.11). If either parameter turns bullish, the caution flag will be out since the quant may be positioning itself to flip to the long side. If both turn bullish, the imminent turn to the long side will be in play.

The bears simply need to keep the semiconductors and banks negative while sending the NYA below 12528 (now at 12628) and the stock market selling will continue.

The stock market will chop along sideways if the chips and banks remain negative and the NYA positive. 1 of these 3 parameters will flinch and immediately tell you the path ahead for the stock market.

8/11/19; 7:00 PM EST =
8/6/19; 1:05 PM EST = -4; signal line is +27
8/6/19; 12:53 PM EST = -18; signal line is +29
8/6/19; 11:53 AM EST = -4; signal line is +32
8/6/19; 11:16 AM EST = -18; signal line is +35
8/6/19; 9:36 AM EST = -4; signal line is +37
8/5/19; 1:50 PM EST = -18; signal line is +40
8/5/19; 1:12 PM EST = -4; signal line is +44
8/5/19; 1:00 PM EST = -18; signal line is +47
8/5/19; 9:36 AM EST = -4; signal line is +49
8/4/19; 7:00 PM EST = +12; signal line is +52

Monday, August 5, 2019

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. Parameters such as banks, retail stocks and commodities have failed into the bear camp along with the upward spike in volatility. The bulls are hanging their hats, and hopes, on chips to save the day.

The bears are cruising along in full control with the algo number 40 points below the signal line. Keybot prints two numbers on Friday; both were pre-scheduled so the actual price action in the stock market was benign to end last week.

S&P futures are tanking 34 points, and were down over 40 a couple hours ago, with the VIX tagging 21, about 3-1/2 hours before the opening bell for the regular Monday US trading session.

The battle is banks versus chips; it is that easy. Bulls need semiconductors (SOX) to remain strong while sending XLF above 27.72 (now at 27.60). If banks flip back into the bull camp, the stock market selling will immediately stop and a small relief rally is likely.

Bears need to keep the financials (XLF) weak while sending the SOX below 1477 (now at 1488). If the chips flip bearish, the stock market is in serious trouble and the market carnage will continue.

Keybot does not print any pre-scheduled numbers this week. Watch XLF 27.72 and SOX 1477 since these two parameters dictate stock market direction ahead. The beat goes on. 

8/11/19; 7:00 PM EST =
8/4/19; 7:00 PM EST = +12; signal line is +52
8/2/19; 10:00 AM EST = +12; signal line is +54
8/2/19; 9:00 AM EST = +12; signal line is +56
8/1/19; 2:26 PM EST = +12; signal line is +58

Thursday, August 1, 2019

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short as the stock market roller coaster ride continues. Commodities failed out of the gate so that created a pall over equities for the Thursday session. The central banker's placed their jackboots on the throat of volatility mid-morning which created bullishness in stocks but that was like trying to keep a beachball underwater and boom, the VIX pops skyward from the early afternoon on. This behavior coincides with President Trump tweeting that the US is imposing more tariffs on China. Stocks dive. Bonds rally.

The bears are cruising with the algo number 46 points below the signal line. Retail stocks and financials gave up the ghost today slapping equities silly. The Dow collapses 626 points intraday from +1% joy to -1% despair. This price action is with a VIX at 14-17. Just think, when the VIX trades above 20, the Dow will be moving 1,000 points or more intraday or day to day. That will be fun.

Bulls need XLF above 27.72 and/or RTH above 109.88 to stop the market bleeding. Bulls also need the VIX to move below 14.48. If these three parameters remain bearish, the bull whippings will continue and stocks will maintain a negative bias. The stock market will immediately stop selling off if any of the three parameters turn bullish.

The US Monthly Jobs Report is released before the Friday opening bell which may create further market turmoil. Keybot prints two pre-scheduled numbers tomorrow morning one at 9 AM EST and the other at 10 AM EST. August is off and stumbling.

8/2/19; 10:00 AM EST =
8/2/19; 9:00 AM EST =
8/1/19; 2:26 PM EST = +12; signal line is +58
8/1/19; 1:41 PM EST = +28; signal line is +60
8/1/19; 1:33 PM EST = +44; signal line is +61
8/1/19; 10:33 AM EST = +58; signal line is +62
8/1/19; 9:36 AM EST = +44; signal line is +62
7/31/19; 7:00 PM EST EOM = +58; signal line is +63

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 2976 during Federal Reserve Chairman Powell's press conference that creates market mayhem. Interestingly, commodities are trying to create bullishness, despite a strong dollar. Copper remains in the bear camp. Retail stocks collapse into the bear camp creating yesterday afternoon's turmoil but then recover into the closing bell. Volatility pops so stocks drop. Markets remain unstable and erratic.

The caution flag is out but the bears are in control with the algo number 5 points below the signal line. Bulls need lower volatility, VIX below 14.46, and/or stronger copper, CPER above 16.92.

Bears need to keep copper weak and volatility elevated. In addition, bears need weaker retail stocks, RTH under 109.92, and/or weaker commodities, GTX under 2490.20. If either RTH or GTX turn bearish, stocks will weaken and weaken severely if both turn bearish.

RTH begins the day at 110.09 only 17 pennies in the bull camp so watch this closely. If RTH fails into the bear camp, stocks will continue lower. GTX is at 2492.08 another game of inches less than 2 bucks in the bull camp. Equities will fall apart if GTX loses 2490.20.

S&P futures are +5 a couple hours before the opening bell for the Thursday trading session in the States. The SPX begins the session at 2980.

On the last one-week trade, the algo program loses a percent and the actual trading loses a couple percent. The SPX benchmark index is up +18.7% this year and the actual trading generated by Keybot is up 27.4%. Keybot exits QQQ and enters SDS. Stay alert for a potential whipsaw. As mentioned, retail stocks, commodities and volatility will tell the market direction story today.

8/4/19; 7:00 PM EST =
8/2/19; 10:00 AM EST =
8/2/19; 9:00 AM EST =
7/31/19; 7:00 PM EST EOM = +58; signal line is +63
7/31/19; 3:32 PM EST = +58; signal line is +64
7/31/19; 3:06 PM EST = +44; signal line is +64
7/31/19; 2:55 PM EST = +28; signal line is +65
7/31/19; 2:51 PM EST = +44; signal line is +67; go short 2976; (Benchmark SPX for 2019 = +18.7%)(Keybot algorithm program this trade = -1.1%; Keybot algo for 2019 = +14.8%)(Actual results this trade = -2.0%; Actual trading results for 2019 = +27.4%)
7/31/19; 2:37 PM EST = +72; signal line is +67
7/31/19; 2:06 PM EST = +58; signal line is +67 but algorithm remains long
7/31/19; 9:36 AM EST = +72; signal line is +68
7/30/19; 10:00 AM EST = +58; signal line is +67 but algorithm remains long
7/30/19; 9:36 AM EST = +58; signal line is +68 but algorithm remains long
7/29/19; 10:34 AM EST = +74; signal line is +69
7/29/19; 10:07 AM EST = +58; signal line is +70 but algorithm remains long
7/29/19; 9:40 AM EST = +74; signal line is +71
7/28/19; 7:00 PM EST = +58; signal line is +71 but algorithm remains long
7/25/19; 12:33 PM EST = +58; signal line is +72 but algorithm remains long
7/24/19; 11:06 AM EST = +74; signal line is +74 but algorithm remains long
7/24/19; 10:36 AM EST = +88; signal line is +75; go long 3009; (Benchmark SPX for 2019 = +20.0%)(Keybot algorithm program this trade = -0.3%; Keybot algo for 2019 = +15.9%)(Actual results this trade = -1.0%; Actual trading results for 2019 = +29.4%)

Tuesday, July 30, 2019

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

Keybot the Quant remains long but is champing at the bit to go short. The drama continues with the Federal Reserve rate decision on tap tomorrow afternoon. The algo number is 9 points below the signal line so Keybot wants to flip short but the internal parameters will not yet fully latch to permit the move so the beat goes on.

If the SPX drops below 3001, Keybot will likely flip short. Hump day begins with the S&P 500 at 3013 so that would be a 13-point drop for the SPX. Bears need equities to sell off slow and steady and not display a gap-down move at the Wednesday open since this may activate an internal timer and delay any move to the short side for about 90 minutes.

Copper collapses on Tuesday after the bulls jammed it higher on Monday to try and support the stock market. Bulls need CPER above 16.94 (now at 16.78 creating market negativity) and/or GTX (commodities) above 2490 (now at 2487 creating market negativity).

Bears need higher volatility to create market mayhem. Bears need the VIX above 14.40 (now at 13.91 creating market positivity).

Note that all three parameters are pennies from their bull-bear lines in the sand. Copper, commodities and volatility are controlling stock market direction currently. Nothing else matters. Retail stocks are also starting to appear on the quant's radar.

Markets may idle sideways until the Fed decision at 2 PM EST followed by Chairman Powell's song-and-dance press conference at 2:30 PM EST. Wednesday afternoon may see wild price action.

Watch CPER 16.94, GTX 2490 and VIX 14.40; these Three Stooges tell you everything you need to know about stock market direction.Tomorrow is the end of July trading (EOM) which will be an up month.

7/31/19; 7:00 PM EST EOM =
7/30/19; 10:00 AM EST = +58; signal line is +67 but algorithm remains long
7/30/19; 9:36 AM EST = +58; signal line is +68 but algorithm remains long
7/29/19; 10:34 AM EST = +74; signal line is +69
7/29/19; 10:07 AM EST = +58; signal line is +70 but algorithm remains long
7/29/19; 9:40 AM EST = +74; signal line is +71
7/28/19; 7:00 PM EST = +58; signal line is +71 but algorithm remains long

Sunday, July 28, 2019

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

Keybot the Quant is on the long side but the algo continues to want to flip short. The internal parameters will not fully latch to allow the move as yet. The algo number is 13 points below the signal line.

The SPX prints a new all-time record high at 3027.98, call it 3028, and a new all-time closing high at 3025.86, call it 3026, on Friday, 7/26/19. Humorously, copper tanks -0.7% and loses -2.5% on the week. The global economy is slowing as evidenced by copper. 'Peak Auto' and a top in the housing market is likely occurring (the two largest users of copper). Copper should be leading higher considering the record stock market highs. The market behavior hints that the never-ending upside in stocks is due to the ongoing central banker largess for over one decade and has very little to do with economic growth projections. 

The stock market bulls need lower volatility and higher copper and commodities to guarantee further upside. Bulls need CPER above 16.97 (now at 16.85) and/or GTX above 2492 (now at 2457). Bulls need a +0.7% pop in copper futures overnight into Monday to prove they have the beans to take stocks higher.

The stock market bears need higher volatility and lower copper and commodities to send equities lower and get Keybot to flip short. Bears need the VIX to move above 14.35 (now at 12.16) which will immediately create serious market turmoil.

If the SPX drops below 3013, Keybot the Quant will likely flip short, hence the imminent turn notation is in the title line. The SPX begins the week at the 3026 record high. The bears would benefit from a slow steady move lower and not a gap-down move. If copper or commodities flip bullish, the stock market bulls will be singing songs and carrying on as the SPX marches higher to more record highs.

For the week ahead, Keybot prints four pre-scheduled numbers; one on Tuesday, one on Wednesday for month-end (EOM) and two on Friday morning.

Watch copper futures overnight and the VIX begins trading at 3 AM EST. Bulls need to immediately see an 11-handle in the VIX to prove that stocks can print further highs.

8/4/19; 7:00 PM EST =
8/2/19; 10:00 AM EST =
8/2/19; 9:00 AM EST =
7/31/19; 7:00 PM EST EOM =
7/30/19; 10:00 AM EST =
7/28/19; 7:00 PM EST = +58; signal line is +71 but algorithm remains long
7/25/19; 12:33 PM EST = +58; signal line is +72 but algorithm remains long

Thursday, July 25, 2019

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

Keybot the Quant algorithm flips to the long side on hump day at SPX 3009 but is already champing at the bit to go short again. The algo number is 14 points below the signal line wanting the model to flip bearish but the internal parameters will not yet fully latch to permit the move.

Bears need the SPX below 2997; if so, it is highly likely that Keybot will flip short, hence the imminent turn notation remains in the title line. Bears will receive help if the VIX can move above 14.37.

Bulls need to prevent the SPX from dropping below 2997. If so, they will skate into the weekend without worry. Bulls need CPER above 16.97, now only a penny below at 16.96. Higher copper will guarantee more upside price action for equities. Bulls will also rejoice with higher commodities needing GTX to move above 2492.

If there is a big gap-down move in the S&P 500 at Friday's opening bell, that is not good for bears. Short sellers need to see a slow steady move lower and then a failure at SPX 2997. This will open the door to the downside, as long as copper remains bearish. If a gap-down does occur, it may trigger a timer and Keybot will likely delay any action for about 90 minutes.

Watch copper futures overnight since as copper goes, so goes the market.

On the last trade that lasted one week, the algo program lost a smidgeon. The actual trading lost -1%. The benchmark S&P 500 is up +20% this year from 2500-ish to 3000-ish. The actual trading generated by Keybot the Quant is up over +29% this year outperforming the SPX and most everyone on Wall Street. The beat goes on.

7/28/19; 7:00 PM EST =
7/25/19; 12:33 PM EST = +58; signal line is +72 but algorithm remains long
7/24/19; 11:06 AM EST = +74; signal line is +74 but algorithm remains long
7/24/19; 10:36 AM EST = +88; signal line is +75; go long 3009; (Benchmark SPX for 2019 = +20.0%)(Keybot algorithm program this trade = -0.3%; Keybot algo for 2019 = +15.9%)(Actual results this trade = -1.0%; Actual trading results for 2019 = +29.4%)
7/24/19; 10:00 AM EST = +74; signal line is +75
7/23/19; 9:36 AM EST = +58; signal line is +75
7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short
7/22/19; 10:51 AM EST = +60; signal line is +74
7/22/19; 9:47 AM EST = +74; signal line is +74 but algorithm remains short
7/22/19; 9:36 AM EST = +60; signal line is +74
7/22/19; 8:28 AM EST = +74; signal line is +75
7/22/19; 8:06 AM EST = +60; signal line is +75
7/22/19; 6:33 AM EST = +74; signal line is +75
7/22/19; 6:15 AM EST = +60; signal line is +75
7/22/19; 4:24 AM EST = +74; signal line is +76
7/22/19; 3:06 AM EST = +60; signal line is +76
7/21/19; 7:00 PM EST = +74; signal line is +76
7/19/19; 10:00 AM EST = +74; signal line is +76
7/17/19; 11:21 AM EST = +74; signal line is +77
7/17/19; 10:43 AM EST = +58; signal line is +77
7/17/19; 10:12 AM EST = +72; signal line is +78; go short 3000; (Benchmark SPX for 2019 = +19.666%)(Keybot algorithm program this trade = +7.6%; Keybot algo for 2019 = +16.2%)(Actual results this trade = +11.0%; Actual trading results for 2019 = +30.4%)

Wednesday, July 24, 2019

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

Keybot the Quant remains short during Tuesday's 20-point pop in the S&P 500. Copper failed yesterday so the price action in the overall stock market was noise. Interestingly, stocks rallied on news of a resumption of the US-China trade talks but the number one key component that should have rallied on such news, copper, fell -0.6%. Housing stocks also crumbled in the up tape.

Same dealio today with the market parameters. Copper, commodities and volatility are controlling stock market direction this week thus far. Bears need higher volatility, the VIX above 14.39 (now at 13.06) which will crush equities.

Bulls need CPER above 16.98 (now at 16.91) and/or GTX above 2493 (now at 2475). Any 1 of the 2 turning bullish tells you that more upside is on the way for equities. If both turn bullish, the SPX is headed to more new all-time highs.

Copper is key since the bulls and bears are only separated by 7 pennies which is about 0.4%. Copper futures are currently trading up +0.3% so the bulls are pushing hard to try and get CPER above 16.98 after the opening bell for the regular session.

Interestingly, CPER above 16.98 for a few minutes may not be able to flip the model long, however, if it jogs, say above 16.98 for 10 minutes or so, then back below 16.98 for 10 minutes or a half-hour, then back above 16.98 again, that may set up the move for Keybot to want to flip long. Nonetheless, stocks remain a coin-flip so the imminent turn notation remain in the title line.

The S&P 500 would likely at least need to move above 3006 today for the model to flip long. The SPX begins at 3005 so the bulls only need a point higher to increase the likelihood that Keybot will flip long, but alas, S&P futures are down -9 with the VIX at 13.06 about 3 hours before the opening bell. 

Bulls need higher copper and commodities while bears need higher volatility. This is all that matters for stock market direction currently. The Mueller hearings begin in a couple hours which may create market angst or joy. 

7/28/19; 7:00 PM EST =
7/23/19; 9:36 AM EST = +58; signal line is +75
7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short

Tuesday, July 23, 2019

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

Keybot the Quant remains short after an active Monday. The model prints 10 numbers yesterday. It is always interesting how the quant may not print any numbers on any given day and then other days it spits out numbers like crazy. The stock market direction is a coin flip as evidenced by the algo number and signal line both at +74. Markets have to make a decision.

Bears need lower copper and higher volatility; CPER below 16.97 and VIX above 14.42, respectively. Bulls need higher commodities; GTX above 2491 to begin the path to more all-time highs.

CPER is at 17.03 and VIX is now trading and printing at the 13.31 palindrome. S&P futures are up +6 about 4-1/2 hours before the opening bell for the Tuesday session. The bears need 6 pennies lower on CPER which represents a -0.4% drop in copper futures. Copper was trading flat until about 50 minutes ago when it quickly dropped to .... wait for it ..... -0.4%.

The battle is with copper and volatility both in the bull camp to begin the day but will they end the day the same? If both parameters remain bullish, and the SPX moves above 2991, Keybot may flip to the long side, hence the imminent turn notation is in the title line.

The SPX begins at 2985 and if a +6 pop occurs at the opening bell the S&P 500 will be at ...... wait for it ....... 2991. If CPER or VIX turn bearish, stocks will begin falling in earnest. Today may be a key pivot day where one side or the other takes strong control.

As mentioned yesterday, the housing market parameter that is programmed into Keybot the Quant has turned bearish after over 7 years in the bull camp. This is important since if it remains negative, which is highly likely, it will prevent Keybot from printing a +100 maximum number going forward. This hints that a significant long-term top may be printing for the US stock market (think months and perhaps years).

7/28/19; 7:00 PM EST =
7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short
7/22/19; 10:51 AM EST = +60; signal line is +74
7/22/19; 9:47 AM EST = +74; signal line is +74 but algorithm remains short
7/22/19; 9:36 AM EST = +60; signal line is +74
7/22/19; 8:28 AM EST = +74; signal line is +75
7/22/19; 8:06 AM EST = +60; signal line is +75
7/22/19; 6:33 AM EST = +74; signal line is +75
7/22/19; 6:15 AM EST = +60; signal line is +75
7/22/19; 4:24 AM EST = +74; signal line is +76
7/22/19; 3:06 AM EST = +60; signal line is +76
7/21/19; 7:00 PM EST = +74; signal line is +76

Sunday, July 21, 2019

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side from SPX 3000 since Wednesday, 7/17/19. The algo number, however, is only 2 measly points below the signal line so the bull-bear tug-o-war continues. The S&P 500 prints new all-time highs above SPX 3K in recent days above the 2941 from last Fall. The 2941 will likely be a key support test at some point in the days ahead.

Note that the quant came up to print a few maximum +100 numbers again. This has occurred in clusters a few times over the last 1-1/2 years and represents epic and historic price action in the US stock market. The algorithm is an oscillator so, by definition, it has +100 as its maximum possible reading (uber off-the-charts bullish) and -100 as the minimum possible reading (end-of-the-world bearishness). The stock market is very likely printing a multi-month and perhaps very long-term multi-year top during the last 10 months.

If you are a young person with exposure to the stock market on the long side, think long and hard about what you own. There is no harm in sitting out of the stock market for a year or so to see what happens. After the 1929 crash, the investors that were in cash were in perfect position to buy assets on the cheap and in a few short years were multi-millionaires. Everyone else lost their shirts and spent the next decade crying in their beers.

As an aside, the quant incorporates a housing market indicator, based on ongoing economic data, and on Wednesday, 7/17/19, the model slips into a housing recession signal. The housing recovery began over 7 years ago but this proprietary indicator in the quant hierarchy says the housing party is over.

On the last trade, from June into mid-July, about 6 weeks or so in length, on the long side, the algo program gains +8% and the actual trading gains a big +11% (due to the long QQQ (tech) ETF). Keybot flipped out of QQQ and into QID. The benchmark SPX is up +19.666% this year, call it +20% from 2500-ish to 3000-ish, a 500-point-ish gain this year. The actual trading generated by Keybot the Quant is up an astounding +30%. Clearly, the Keybot the Quant algorithm is outperforming every quant model on Wall Street as well as most every high-paid strategist and analyst in the financial markets. Keybot is a smart robot.

This message is typed on Sunday evening on the US East Coast. US futures are trading. S&P's are up +1 call it flat. The market can go either way. Very simply, copper, volatility and commodities are the three main parameters currently dictating broad stock market direction.

The stock market bears need weaker copper and/or higher volatility to guarantee lower equities. Bears need CPER under 16.95 (now at 17.17) and/or VIX above 14.53 (now at 14.45). If 1 of the 2 parameters turn bearish, stocks will be in big trouble. If both turn bearish, stocks are going to be falling like rocks.

The stock market bulls need stronger commodities to prove that more upside in equities is on the way. Bulls need GTX above 2495 (now at 2452). The bulls are going to be driving the stock market strongly higher if commodities rally. If GTX flips bullish, consider the imminent turn to the long side to be in play but the SPX would likely have to move above the 3006-ish level to cause Keybot to flip long.

You can see that the copper and volatility parameters are a game of pennies. Watch copper futures trading overnight since it will give you a heads up about the US stock market. Weaker copper is a huge feather in the bear's cap while strong copper will have the bulls cheering for victory.

VIX is only 8 cents from signaling bigtime stock market trouble. This is the key parameter to watch; VIX 14.53. It will tell you the market direction story ahead. Vol begins trading at 3 AM EST so that will provide a very important heads-up for US trading on Monday. Bears win big if the VIX pops above 14.53 but the bulls will remain very confident below 14.53. The beat goes on.

7/30/19; 10:00 AM EST =
7/28/19; 7:00 PM EST =
7/21/19; 7:00 PM EST = +74; signal line is +76
7/19/19; 10:00 AM EST = +74; signal line is +76
7/17/19; 11:21 AM EST = +74; signal line is +77
7/17/19; 10:43 AM EST = +58; signal line is +77
7/17/19; 10:12 AM EST = +72; signal line is +78; go short 3000; (Benchmark SPX for 2019 = +19.666%)(Keybot algorithm program this trade = +7.6%; Keybot algo for 2019 = +16.2%)(Actual results this trade = +11.0%; Actual trading results for 2019 = +30.4%)
7/17/19; 9:36 AM EST = +72; signal line is +77 but algorithm remains long
7/17/19; 9:00 AM EST = +58; signal line is +77 but algorithm remains long
7/16/19; 1:29 PM EST = +70; signal line is +77 but algorithm remains long
7/16/19; 12:41 PM EST = +84; signal line is +77
7/15/19; 12:56 PM EST = +100; signal line is +77
7/15/19; 10:36 AM EST = +84; signal line is +76
7/15/19; 10:12 AM EST = +100; signal line is +76
7/15/19; 10:02 AM EST = +84; signal line is +75
7/14/19; 7:00 PM EST = +100; signal line is +75
7/12/19; 3:42 PM EST = +100; signal line is +74
7/10/19; 9:36 AM EST = +84; signal line is +73
7/10/19; 7:45 AM EST = +70; signal line is +73 but algorithm remains long
7/10/19; 7:03 AM EST = +56; signal line is +74 but algorithm remains long
7/9/19; 9:39 AM EST = +70; signal line is +74 but algorithm remains long
7/9/19; 4:13 AM EST = +56; signal line is +74 but algorithm remains long
7/8/19; 10:43 AM EST = +70; signal line is +74 but algorithm remains long
7/8/19; 9:58 AM EST = +84; signal line is +74
7/7/19; 7:00 PM EST = +70; signal line is +73 but algorithm remains long
7/5/19; 9:00 AM EST = +70; signal line is +73 but algorithm remains long
7/2/19; 9:37 AM EST = +70; signal line is +72 but algorithm remains long
7/1/19; 2:54 PM EST = +84; signal line is +71
7/1/19; 2:41 PM EST = +70; signal line is +69
7/1/19; 2:30 PM EST = +84; signal line is +68
7/1/19; 2:16 PM EST = +70; signal line is +67
7/1/19; 1:26 PM EST = +84; signal line is +66
7/1/19; 1:11 PM EST = +70; signal line is +65
7/1/19; 9:36 AM EST = +84; signal line is +64
6/30/19; 7:00 PM EST EOM EOQ2 EOH1 = +70; signal line is +62
6/28/19; 3:25 PM EST = +70; signal line is +60
6/28/19; 2:42 PM EST = +56; signal line is +58 but algorithm remains long
6/28/19; 10:00 AM EST = +70; signal line is +57
6/26/19; 10:36 AM EST = +70; signal line is +54
6/26/19; 9:55 AM EST = +86; signal line is +53
6/26/19; 9:36 AM EST = +70; signal line is +50
6/25/19; 2:24 PM EST = +72; signal line is +47
6/25/19; 1:25 PM EST = +86; signal line is +45
6/25/19; 1:16 PM EST = +72; signal line is +43
6/25/19; 11:19 AM EST = +86; signal line is +40
6/25/19; 10:27 AM EST = +72; signal line is +38
6/25/19; 9:39 AM EST = +86; signal line is +35
6/25/19; 9:36 AM EST = +72; signal line is +31
6/23/19; 7:00 PM EST = +56; signal line is +28
6/21/19; 12:21 PM EST = +56; signal line is +26
6/21/19; 10:49 AM EST = +70; signal line is +23
6/20/19; 3:59 PM EST = +56; signal line is +20
6/20/19; 3:02 PM EST = +70; signal line is +17
6/18/19; 10:02 AM EST = +56; signal line is +14
6/18/19; 9:00 AM EST = +40; signal line is +12
6/16/19; 7:00 PM EST = +40; signal line is +10
6/14/19; 10:00 AM EST = +40; signal line is +8
6/12/19; 9:43 AM EST = +40; signal line is +6
6/10/19; 9:38 AM EST = +56; signal line is +4
6/9/19; 7:00 PM EST = +40; signal line is +3
6/7/19; 9:51 AM EST = +40; signal line is +2
6/7/19; 9:00 AM EST = +24; signal line is 0
6/4/19; 3:09 PM EST = +24; signal line is -1
6/4/19; 2:13 PM EST = +8; signal line is -1
6/4/19; 2:04 PM EST = +24; signal line is -2
6/4/19; 1:16 PM EST = +8; signal line is -2
6/4/19; 12:53 PM EST = +24; signal line is -3
6/4/19; 12:45 PM EST = +8; signal line is -3
6/4/19; 12:38 PM EST = -6; signal line is -2 but algorithm remains long
6/4/19; 12:07 PM EST = +8; signal line is -1
6/4/19; 11:48 AM EST = +24; signal line is +1
6/4/19; 11:35 AM EST = +8; signal line is +1; go long 2788; (Benchmark SPX for 2019 = +11.2%)(Keybot algorithm program this trade = +1.5%; Keybot algo for 2019 = +8.6%)(Actual results this trade = +1.3%; Actual trading results for 2019 = +19.4%)