Thursday, September 29, 2011


Keybot the Quant whipsaws back to the long side in the final two minutes of trading today. This is odd behavior for the algo but it testifies to the wild moves in the markets now due to the higher volatility. In the final two minutes, retail, RTH, was pumped flipping the algo back to the long side. Both the algo and the actual trading took a 1% loss in less than a couple hours time on today's whipsaw move.

So today was simply a round trip.  For tomorrow, watch RTH again, it will dictate broad market direction. If RTH stays above 103.90 then the bulls will be in good shape. If RTH loses 103.90, then markets will weaken like today and head lower. Utilities look like they want to finish the week bullish with UTIL now at 439 and only having to stay above 427 to stay bullish, and keep the broad markets buoyant. Semi's were beaten today so the market bulls do not appear able to gain strength from that sector, and the other major sectors are all in sick bay as well.  Thus, retail remains the key.

For the SPX in the Friday session, starting at 1160, the market bulls need to touch 1176 and the upside buyers will enter in force. The market bears need to lose the 1140 level, if you see an 1139 handle, the sellers will jump in large, and the indexes will stumble lower quickly. A move thru 1141-1174 is sideways slop.

Tomorrow is EOM and EOQ3. The ride is not over yet so stay on guard for anything. RTH will lead the way.  Keybot clicks off a pre-scheduled number tomorrow morning at 10 AM.

10/9/11; 7:00 PM EST =
10/7/11; 10:00 AM EST =
10/2/11; 7:00 PM EST EOM EOQ3 =
9/30/11; 10:00 AM EST =
9/29/11; 3:58 PM EST = -40; signal line is -44; go long 1157; (Benchmark SPX for 2011=-8.0%)(Keybot this trade=-1.0%; Keybot for 2011=+22.9%)(Actual this trade via DOG=-0.9%; Actual for 2011=+34.3%) WHIPSAW
9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

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