Sunday, October 2, 2011


Keybot the Quant starts the new week on the short side but with these erratic markets, continue to expect the unexpected. The utes are the only bullish sector as measured by the algo, and for the entire week ahead, the quant is using UTIL 424 as a line in the sand that determines market bullishness versus bearishness. If UTIL, now at 433, comfortably nine points above, falls under 424, the broad markets will be in a strong sell off mode. If the 424 level is maintained all week long, the bulls will keep the indexes buoyant.

Retail is the sector on the front lines pushing the markets on each side of the bull-bear street each day.  RTH topped and dropped intraday at 3 PM Friday and the markets tumbled into the close. If RTH, now at 102.39, stays under 103.60, the market bears are having fun, if RTH moves above 103.60 the market bulls are regaining control.

For the SPX, the market bears only need to see red futures, since the Friday close was at the lows, and that will be enough to explore lower levels. If 1131 fails, the 1119-1121 cluster is likely on tap. The market bulls need to touch an 1160 handle to undo Friday's damage and regain control, a formidable task. Monday's broad market direction will be dictated by the behavior of RTH and UTIL as described above.

10/31/11; 7:00 PM EST EOM =
10/30/11; 7:00 PM EST =
10/28/11; 10:00 AM EST =
10/25/11; 10:00 AM EST =
10/23/11; 7:00 PM EST =
10/19/11; 9:00 AM EST =
10/16/11; 7:00 PM EST =
10/14/11; 10:00 AM EST =
10/9/11; 7:00 PM EST =
10/7/11; 9:00 AM EST =
10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42
9/30/11; 12:11 PM EST = -56; signal line is -42
9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short
9/30/11; 10:00 AM EST = -56; signal line is -43
9/30/11; 9:30 AM EST = -56; signal line is -43
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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