Monday, September 26, 2011


Keybot the Quant is long as of this morning. Retail launched the indexes today. Thus, for tomorrow, keep watching RTH to see if the bulls can maintain momentum. Also, the semiconductors and financials are now important to see if they can add to the bullish strength. Talking levels, the RTH must stay above 104.25 and now sits comfortably above at 105.97. The markets will remain buoyant if RTH stays above 104.25.

For the semi's, watch the socks, SOX, now at 359.50. If SOX moves above 364 the market bulls will receive further fuel for the rally. Considering the AAPL's news on decreased iPad shipments and the lagging tech sector today, this may be a toughie. The other sector of importance is the financials. Watch XLF, now at 12.20. The XLF needs to move above 12.80 to supply bull fuel for the indexes. Neither of these two tasks are easy, the semi's are probably more likely to happen than the financials.

But focus on the RTH since if the 104.25 is lost, nothing will matter, the market bears will be slapping the indexes south again.  The SPX:VIX ratio is at 29.80 well under the 35 level which would confirm a strong bull rally so the bulls have nothing to cheer about yet, today was simply a market bounce day, nothing more, nothing less.

For the SPX tomorrow, the bulls have the wind at their backs since the 1162.95 close is near the intraday high of 1164.19. If the market bulls bounce only a couple points, and move up over the 1164 tomorrow, the buyers will enter in force and some large block buying will initiate, driving the indexes even higher. The bulls obviously want to see green futures overnight and they will be whistling a happy tune in the morning.  The market bears have a more formidable task ahead since they need to move the SPX down to 1131 to regain the momo. The bears will instead focus on stalling the upside move and the best way to do that is to provide weakness in the semi's and retail sectors. Keybot clicks off a pre-scheduled number at 10 AM tomorrow morning so we can take a look at the action at that time. For now, the algo is long. Extreme caution is warranted.

10/9/11; 7:00 PM EST =
10/7/11; 10:00 AM EST =
10/2/11; 7:00 PM EST EOM =
9/30/11; 10:00 AM EST =
9/27/11; 10:00 AM EST =
9/26/11; 11:41 AM EST = -40; signal line is -50; go long 1148; (Benchmark SPX for 2011=-8.7%)(Keybot this trade=+0.2%; Keybot for 2011=+24.1%)(Actual this trade via SH=-1.3%; Actual for 2011=+34.1%)

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