Sunday, April 17, 2011


Keybot the Quant remains short to start the new week.  Friday buoyancy in the indexes did nothing to change the bullish or bearish position of key sectors.  Defensive sectors such as consumer staples and healthcare bounced.  Utilities, retail, commodities ex copper and volatility remain in the bull camp while semi's, financials and copper remain bearish.  None of the sectors want to change their posture so the indexes moved in a sideways funk as last week progressed. This week is a big tech earnings week so watch the semi's and XLK react.

The VIX is testing levels from July 2007; three months before the top in the indexes in October 2007.  The VIX 15.0-15.5 area corresponds to the October 2007 high, Summer 2008 high, April 2010 high, February 2011 high and now, perhaps, the April-May 2011 high in the indexes.  If VIX should venture under 15, the 14 handle was touched last Friday, then the market bulls will be in firm control as complacency would reign thru summer.  Considering the instability currently in the markets, this outcome is less likely than the VIX actually spiking back up in concert with the indexes selling off.

With the holiday shortened week ahead, volume should be light, and considering the POMO pumps, the bulls would have an advantage.  Dicey trading should be expected over the next three weeks.  Watch UTIL 408 level; below and the indexes will be selling off, above and the markets will remain buoyant.

If the SPX hits 1323 and moves slightly above after the open, the buying should again accelerate to the upside.  If SPX dips under a 1315 handle, which was key support last week, and then moves down to print a 1313 handle, then the selling will increase for the downside.

Keybot triggers a pre-scheduled number on Tuesday morning.

5/8/11; 7:00 PM EST =
5/7/11; 9:00 AM EST =
5/1/11; 7:00 PM EST; EOM (April) =
4/29/11; 10:00 AM EST =
4/26/11; 10:00 AM EST =
4/24/11; 7:00 PM EST =
4/19/11; 9:00 AM EST =
4/17/11; 7:00 PM EST = +28
4/15/11; 10:00 AM EST = +28
4/13/11; 9:42 AM EST = +28
4/13/11; 9:30 AM EST = +44; signal line is +46
4/12/11; 3:18 PM EST = +28
4/12/11; 2:06 PM EST = +44; signal line is +47
4/12/11; 11:49 AM EST = +28
4/12/11; 10:44 AM EST = +14
4/12/11; 10:26 AM EST = +30
4/12/11; 10:19 AM EST = +14
4/12/11; 10:06 AM EST = +28; signal line is +49
4/12/11; 9:56 AM EST = +44; signal line is +48; go short 1315; (Benchmark SPX for 2011=+4.5%)(Keybot this trade=-0.5%; Keybot for 2011=+1.7%)(Actual this trade via SSO=-1.4%; Actual for 2011=-0.1%)
4/12/11; 9:35 AM EST = +44; signal line is +47 but algorithm says stay long

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