Monday, October 3, 2011


Keybot the Quant remains short, idling along calmly all day long until the final couple minutes, kicking off a number just before the bell. UTIL 424 is very important this week and it failed in the final minute. This casts additional bearishness on the indexes but the early action tomorrow will supply confirmation, or not. Many algo's have the 15-week utility lookback technique programmed, Keybot does, so this was high drama all afternoon.  Reference Keybot's sister site, The Keystone Speculator, to read the real-time references for UTIL as the afternoon played out.

If you remember back during the August action, we spent a few days watching the UTIL 50 week MA cross, do you remember? The UTIL 50 week MA represents a trap door for the broad markets. This value is 417.91, call it 418 so it is easy to remember.  Thus, for tomorrow (Tuesday), the utes will dictate the broad market direction. If UTIL moves back above 424, the market bulls will be back in the markets buying and the indexes will float back up.  If UTIL remains between 424 and 418, the market selling will continue in an orderly fashion, the indexes will trail off lower.  If UTIL loses 418, the markets will go into free fall.

That said, the internals for the markets; CPC, NYAD, NYHL and TRIN are all agreeable to a market bounce. The beat up financials are also ready for a recovery rally now so stay cautious from getting overly bearish on the indexes at this juncture. Use UTIL 424 and 418 as a guide. For now, the algo remains firmly bearish but stay vigilant for a flush and potential bottom coming tomorrow, or soon.

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 =
10/3/11; 3:59 PM EST = -72
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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