STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot remains short despite the big up move yesterday. The algorithm clicked off a number in the afternoon that should have flipped Keybot long but additional algorithm rules were not satisfied, so the algorithm stays short.  Retail came on strong yesterday and performed the heavy lifting in the indexes.  Watch RTH 107.62, now at 107.82. If RTH loses 20 cents at the open, then the broad market bears will be running again.  If RTH stays above 107.62, the market bulls will maintain index buoyancy.

The algorithm continues to set records.  Keybot was 22 SPX handles above the current turn from 1277, this has never occurred, the algorithm would have typically flipped long by now, but has not, yet.  Futures are on the red side so time will tell.  If the SPX hits 1298, Keybot will probably flip long. Markets remain unstable.  The higher volatility will add to the wild large moves in the indexes in the days ahead.

NYA, now at 8156, went back above the 40 week MA at 8049, so the markets are trying to stop the fall into a secular bear market with all their might. Utes, UTIL, are comfortably above the 418 danger level for this week so this favors the bulls.

For the SPX today, if the market bulls can touch a 1298 handle, the bulls are going to run it  higher in short order, up to test 1307.  The futures are red, but the bears need to push the SPX down to a 1278 handle to make any real noise.  If they cannot do that today, they got nothing and indexes will float along sideways.  The RTH and NYA criteria above is all you need to watch today; this will tell you the broad market direction. FDX earnings are critical for markets today.

7/3/11; 7:00 PM EST =

7/1/11; 10:00 AM EST =

6/30/11; 7:00 PM EST EOM =

6/28/11; 10:00 AM EST =

6/26/11; 7:00 PM EST =

6/21/11; 2:44 PM EST = -12; signal line is -28 but algorithm says stay short

6/21/11; 9:30 AM EST = -28; signal line is -28

6/19/11; 7:00 PM EST = -42; signal line is -28

6/17/11; 12:17 AM EST = -42

6/17/11; 11:12 AM EST = -28; signal line is -27

6/17/11; 11:02 AM EST = -42

6/17/11; 10:47 AM EST = -28; signal line is -26

6/17/11; 10:23 AM EST = -42

6/17/11; 10:00 AM EST = -28; signal line is -25

6/17/11; 9:32 AM EST = -28

6/16/11; 9:00 AM EST = -42

6/15/11; 11:38 AM EST = -42

6/15/11; 11:31 AM EST = -28

6/15/11; 11:20 AM EST = -12; signal line is -23 but algorithm says stay short

6/14/11; 9:30 AM EST = -28; signal line is -24

6/13/11; 3:35 PM EST = -42

6/13/11; 1:59 PM EST = -28; signal line is -23

6/13/11; 11:51 AM EST = -42

6/12/11; 7:00 PM EST = -28

6/10/11; 1:54 PM EST = -28; signal line is -21

6/10/11; 1:45 PM EST = -42

6/10/11; 10:06 AM EST = -28; signal line is -18; go short 1277; (Benchmark SPX for 2011=+1.5%)(Keybot this trade=-1.0%; Keybot for 2011=+5.4%)(Actual this trade via DIA=-1.1%; Actual for 2011=-0.1%)