Sunday, October 23, 2011


Keybot the Quant is currently short but will flip long if the SPX can move above 1239, only a point higher than the Friday close at 1238.  The algo would be long already but it is held back in a large part due to the gap up open on Friday morning. The algo is simply waiting for tomorrow's open to determine if the bulls have game. All you have to do is watch the futures since a green start tomorrow should trigger the 1239 which will send the SPX up to 1240, 1242 then 1247. If the market bears can wrestle back control, 1233 serves as support then the critical support cluster of 1225-1227. The utilities, semi's, retail and financials are the main support for the markets.

The semiconductors are very important this week. The SOX is at 372 and remains firmly in the bull camp, but if the SOX touches a 365 handle, the markets will be in trouble. Volatility remains elevated above 30, no doubt causing the wild large-point swings in the indexes.  Watch VIX 29.30, now over 31, if VIX stays above 29.30 this favors market bears. If the VIX falls under 29.30, the market bulls will run the indexes lots higher.

At the opening bell we see if the algo takes its lumps and returns to the long side, or not, 1239 is the key.  Keybot prints two pre-scheduled numbers this week, one on Tuesday morning and one on Friday morning.

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 = -8; signal line is -24 but algorithm says stay short
10/20/11; 1:20 PM EST = -8; signal line is -24 but algorithm says stay short
10/20/11; 1:06 PM EST = -24; signal line is -24; algorithm remains short
10/20/11; 10:59 AM EST = -40; signal line is -24; go short 1206; (Benchmark SPX for 2011=-4.1%)(Keybot this trade=+5.2%; Keybot for 2011=+29.1%)(Actual this trade via DIA=+4.8%; Actual for 2011=+40.3%)

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