STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short for four weeks now.  The Sunday print leaves the algorithm number unchanged at -72, comfortably 40 points below the signal line where a potential trend change from short to long would occur. The SPX falling below the 12 month MA, the slope of the 150 day MA turning negative and the failure of the utlities sector all contributed to the collapse in the markets.

For this week, the utes, measured by UTIL, starts at 414.72. The 50 week MA is 413.29, this number obviously changes slightly as time progresses (since it is a moving average). The 15-week look-back comparison number for this week is 429.06.  Thus, UTIL is above 413.29 indicating a move off the bottom for the broad market indexes already.  If UTIL moves under 413.29, major selling will come into the markets again.  If UTIL stays between 413.29 and 429.06, the broad markets are recovering into a snap back rally mode.  If UTIL moves above 429.06 any day this week, the broad markets will be moving strongly upwards for an extended substantial rally.

The technical damage last week was extensive and severe. Volatility, VIX, requires close watching, closing in the 30's. For the SPX in Monday's session, starting at 1199, if 1218 is taken out to the upside the buyers will come in large numbers, the broad markets will accelerate upwards from there. The market bears have to push hard, down to the Friday low of 1168, to keep the negative party going. Barring that, a move thru 1170-1217 can be considered sideways slop with no resolution either way for the path forward.

Keybot prints out only one pre-scheduled number this week on Friday morning.  So we will see if the algorithm simply idles along content with staying short, or, if the bulls come back in to boost the indexes. Markets remain highly unstable.

8/21/11; 7:00 PM EST =

8/16/11; 9:00 AM EST =

8/14/11; 7:00 PM EST =

8/12/11; 10:00 AM EST =

8/7/11; 7:00 PM EST = -72; signal line is -32

8/5/11; 12:44 PM EST = -72

8/5/11; 9:53 AM EST = -88

8/5/11; 9:32 AM EST = -72; signal line is -24

8/5/11; 9:00 AM EST = -88

8/4/11; 3:29 PM EST = -88