Monday, September 26, 2011

SPX Daily Chart Showing Keybot the Quant Algorithm Turns

Keybot flipped to the long side this morning. The odd trading day today was all about the strength in retail and not one media outlet has mentioned the retail sector today. That's good.  From late last week the algo was monitoring the retail sector to confirm market strength and the utility sector to confirm market weakness.  The bulls came to play today and bounced retail. Once RTH moved above 103.80-ish the broad markets followed higher. RTH closed only pennies shy of 106, now two points above the level Keybot identifies as market bullish.

This was the sixth turn by the algo in the last 17 trading days which is not typical for Keybot. This action reflects the high market volatility which results in wild large points swings day after day. Things will not settle down until volatility, VIX, heads lower.

Keybot the Quant was odd man out after committing to the long side this morning, some traders wondering if the robot had a screw loose.  The SPX actually drifted lower back into the 1130's before catapulting higher to honor the shift to the long side by the algo. Tomorrow we see if the move has any legs.

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