Tuesday, October 25, 2011


Keybot the Quant remains long despite the selling today. The four pillars supporting the markets, utes, semi's, retail and financials all hung in there fine today. The financials, XLF, tumbled into the close breaking the 13 level down to a low of 12.93, but this was still 18 cents above danger.

The markets will float sideways to sideways up as long as the four sectors above remain bullish, as measured by the quant. The two closest to losing luster are semi's, SOX, watch the 367.30 level, and, XLF, watch the 12.75 level. If either of these fail, the market selling will noticeably increase. UTIL 432 is in play for the rest of the week as well.

For the SPX tomorrow, starting at 1229, market bulls have to retrace the loss today back up to touch 1254, a formidable task. Instead, bulls will simply try to stabilize the markets by not allowing SOX and XLF to fail below the levels shown. The market bears have it a little easier tomorrow. If the 1227 is lost, only two points lower, and you see a 1226 handle, the sellers will enter in force and the SPX and the broad markets will sell off further in short order. A move thru 1228-1250 is sideways action. The market bears got nothing unless they break down thru SOX 367.30, UTIL 432 and/or XLF 12.75.

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 = -8; signal line is -20
10/25/11; 9:30 AM EST = -8; signal line is -20
10/24/11; 10:34 AM EST = +6; signal line is -21
10/24/11; 9:30 AM EST = -8; signal line is -23; go long 1238; (Benchmark SPX for 2011=-1.6%)(Keybot this trade=-2.7%; Keybot for 2011=+26.4%)(Actual this trade via MYY=-3.8%; Actual for 2011=+36.5%)

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