Tuesday, October 18, 2011


Keybot the Quant remains long as the Tuesday session begins. Despite the big sell-off in the indexes yesterday, the algo remains long, for now. No additional numbers printed after the opening bell number yesterday; the utes remain buoyant so the market bears have not seized back control of the markets yet.

Some of the major sectors tracked by the algo show that the semiconductors, retail and utes are bullish, as measured by the quant, with financials, copper, commodities and volatility in the bear camp. Thus, flip flops in these categories will drive broad market direction. The key to watch when the bell rings is UTIL 436.75, now at 438.14. If 436.75 fails, the down move is real and Keybot will likely flip short. If 436.75 holds, Keybot will probably remain long and perhaps the markets will buy back yesterday's losses.

For the SPX today, if the index loses a couple points to get under 1198.50, the sellers will enter in force and drop the SPX several additional handles quickly. If this occurs, watch UTIL to see if it cracked, or not, if so, the down side is real.  If UTIL holds 436.75, then the indexes should recover. The market bulls will simply try to stop the market selling today. Since the bulls need to get up and over 1224 to bring the bullish energy back, a formidable task today, the bulls will settle with stopping the UTIL from falling under 436.75; this would keep the bulls in the overall game.  A SPX move thru 1200-1222 is sideways slop. Caution is warranted, especially in the early trading, the utes will tell the tale after the bell rings.

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 =
10/17/11; 9:37 AM EST = -24; signal line is -31
10/16/11; 7:00 PM EST = -10; signal line is -32
10/14/11; 3:56 PM EST = -10; signal line is -34
10/14/11; 3:48 PM EST = -40; signal line is -37 but algorithm says stay long
10/14/11; 3:40 PM EST = -24; signal line is -38
10/14/11; 3:32 PM EST = -10; signal line is -40

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