Sunday, April 24, 2011

STOCK MARKET BULLISH -- LONG

Keybot the Quant starts the new week on the long side.  All major sectors are in the bullish camp except financials.  Copper turned bullish late last week.  Thus, the algorithm has been watcing these two sectors closely since they are key to current broad market direction.

This week is a crapshoot since Chairman Bernnake will have to address the dollar strength versus weakness question on Wednesday afternoon.  The markets will jump in the appropriate direction, up if he continues with his dovish stance, stating the continuation of QE2 until the very end in June, or even hints of QE2.5 or QE3, any of these statements by the Chairman will send the dollar down and stocks soaring.

If, however, the Chairman back pedals, even a tiny bit, from his dovish stance, and says the cliche about a strong dollar policy, or hints that QE2 will end a couple weeks sooner, or that the billions in POMO pumps will be trimmed back, or no QE3, any of this verbage and the dollar will jump big and commodities and equities markets will sell off.  So Keybot is at the mercy of Bernanke this week and will respond quickly once the Chairman speaks.

For tomorrow, since the SPX closed only a few pennies from the HOD Thursday, any positive futures situation will result in a continued gain of a few spoo handles.  That tiny gap at SPX 1340 remains open and needs filled and tests would be in order for the 2/18/11 close at 1343 and the HOD at 1344.

If the bears push the SPX under 1333 at the open (the futures would need to be down 3 or 4 handles), then the markets will give back some points in the indexes, the SPX will move lower to test 1331, 1328 and 1325. The algorithm has a wild ride ahead this week.

Keybot will kick out two pre-scheduled numbers this week; one on Tuesday morning and one on Friday morning. Considering the potential wild volatility ahead this week, and the current unstable markets, the algorithm may be clicking off many numbers during trading hours this week, so stay tuned.

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 = +60
4/21/11; 9:35 AM EST = +60
4/20/11; 9:30 AM EST = +44; signal line is +42; go long 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=-0.7%; Keybot for 2011=+1.0%)(Actual this trade via DXD=-1.9%; Actual for 2011=-2.0%)
4/19/11; 9:00 AM EST = +28

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