Sunday, July 17, 2011

STOCK MARKET BEARISH -- SHORT -- CAUTION


Keybot the Quant remains bearish to start the week. The major sectors remain entrenched either in the bear camp, as with financials, semi's, commodites (ex-copper) and volatility, or in the bull camp, as with utilities, copper and retail. The algorithm would view commodities as bullish if the CRB would get up and over 350, now at 346. Keybot would view retail as bearish if the RTH would lose the 109 handle, now sitting only about one point above at 110.35. 

The bulls have the wind at their backs to start Monday's session. If the futures are green, and the bulls move the SPX up by only a point and one-half higher to touch the 1318 handle, it will be off to the races for the upside with 1321, 1323 and 1326 levels on tap for testing.

The bulls need to drive lower to the 1307 gap area if they expect to get any substantial selling started.  If the bears can get under the 1308 handle, the selling will accelerate and the SPX will move down to the 62% Fibonacci retracement and gap fill at 1298-ish.

1308-1317 represents sideways slop.  Typically, markets will move opposite on Monday as compared to the Opex Friday close.  Friday was very strong up into the close, thus, some weakness would be anticipated for Monday morning. Even if the indexes run higher after Monday's opening bell, stay on guard for some potential weakness to develop to satisfy this typical seasonality.

There is one pre-scheduled number for this week on Tuesday morning.

7/31/11; 7:00 PM EST EOM =
7/29/11; 10:00 AM EST =
7/26/11; 10:00 AM EST =
7/24/11; 7:00 PM EST =
7/19/11; 9:00 AM EST =
7/17/11; 7:00 PM EST = +4; signal line +15
7/15/11; 10:00 AM EST = +4
7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

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