Tuesday, September 27, 2011


Keybot the Quant is long to start the Wednesday session.  The rally started because of strength in retail and then received more juice today with semiconductors. For tomorrow, watch SOX, now at 366.01. If SOX loses the 365.40 level, this will signal that the rally is in big trouble. Market bulls need to maintain 365.40 or higher.

For retail, watch RTH, now at 105.24.  The algo is monitoring 104.11, so about a point lower, and the same idea is in place. If 104.11 is lost the market bears are seizing control of the broad markets, the rally will be fading fast. Since the rally occurred first with retail strength, then semi's, look for the reverse order to take place should the market bears come to play. More than likely, semi's will fail first, then if the rally is truly cooked, retail will fail.

On the bull side, for the rally to continue, retail and semi's are already in the bull camp, as measured by the quant, so the next major sector it is monitoring is the financials. Bulls need the XLF, now at 12.26, to move above 12.80, if so, the rally will be in full mode skyward. This appears to be a formidable task, however.

For the SPX, the market bulls gave up the ghost into the close and hurt their momo. The SPX starts at 1175 and the bulls need to push up to touch 1196 to regain the momo, so they have their work cut out for them. If the bulls can touch 1196, however, the upside will rock and the bulls will not look back.  The market bears have a slightly easier path. The bears need to push the SPX down to 1163, if so, they can get the large block sellers to enter the markets and the indexes will lose several more handles quickly.  A move thru 1164-1195 is sideways mumbo jumbo. SOX and RTH are the keys as described above, watch them closely, they will tell you the direction of the broad markets during the Wednesday session. Note the caution flag remains in the title since the markets are churning as the Europe sound bites hit the wires.

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; 3:58 PM EST = -24
9/27/11; 3:46 PM EST = -40
9/27/11; 10:00 AM EST = -24
9/27/11; 9:51 AM EST = -24
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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