Keybot the Quant starts the new trading week remaining short, the algo continues along on the short side since 7/11/11. The signal line continues to creep lower towards the algo number, now only 20 ticks away, but the algo remains firmly bearish for now.
The utes will lead the markets back up, if the markets choose to go up. UTIL, now at 411.21, needs to climb above 413.67 for the bulls to continue a recovery rally. If not, the bears remain in control and the broad indexes will move sideways to sideways down. Watch the critical UTIL 413.7-ish level all week long, above and market bulls are happy, below and bears are happy.
When the SPX:VIX ratio moves above 35, that will signal a big up day for the indexes and a triple digit up day for the Dow Industrials. The ratio has a 32 handle to start the week. Staying below 35 and the bears will rule, above 35 means the bulls have a recovery rally in place.
For the SPX in Monday's session, starting at 1179, the market bulls need to push the indexes higher to touch 1189. If so, substantial buying will enter the markets, the indexes will jump several more handles in short order, UTIL should be bullish, and the recovery rally will probably gain steam. Conversely, if the futures are red tonight, and Monday starts off with the bears pushing lower, if the 1171 handle is lost, the bears are gaining momo, if 1170.74 is lost, you will see the markets collapse several handles in minutes. This would dash hopes of a recovery rally. A move thru 1172-1188 is sideways slop, a bull-bear standoff. One pre-scheduled number clicks off this week before Tuesday's open. Markets remain highly unstable.
8/28/11; 7:00 PM EST =
8/26/11; 10:00 AM EST =
8/21/11; 7:00 PM EST =
8/16/11; 9:00 AM EST =
8/14/11; 7:00 PM EST = -88; signal line -68
8/12/11; 2:11 PM EST = -88
8/12/11; 1:48 PM EST = -72; signal line is -62
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