Monday, November 14, 2011


Keybot the Quant remains long. The algo printed a number just before the close, remaining under the signal line and wanting to go short but other algo rules are holding it back, at least thru today's close. The two key sectors that are dictating market direction are voaltility and financials. Tomorrow will be dictated by those two culprits again in addition to the SPX levels.

If VIX stays under 31.20, now at 31.13, only seven pennies under, market bulls are favored. The VIX was elevated all day today until the last minute of trading so the VIX will immediately dictate the market action when the bell rings tomorrow. If the VIX jumps back above 31.20 then the bears came to play again.  If the XLF stays under 13.03, now at 12.97, the market bears are favored.  Thus, if XLF moves above 13.03 after the open, this will show that the bulls came to play.

For the SPX, now at 1251.78, if the market bears push lower to lose the 1247 handle and touch 1246, the down side will accelerate.  If the market bulls can push higher to touch 1264, the large block buyers will enter in force and the indexes will move upwards several more handles in short order. A move thru 1248-1262 is sideways slop. Thus, simply watch VIX 31.20, XLF 13.03 and SPX 1246/1264 to determine market direction on Tuesday. Interestingly, the SPX closed with a 1251 handle today; the same price where Keybot entered the long side, more testimony to the bull-bear battle ongoing, one side will win soon.

11/30/11; 7:00 PM EST EOM =
11/29/11; 10:00 AM EST =
11/27/11; 7:00 PM EST =
11/25/11; 10:00 AM EST =
11/20/11; 7:00 PM EST =
11/17/11; 9:00 AM EST =
11/14/11; 3:59 PM EST = -10; signal line is -4 but algorithm says stay long
11/14/11; 11:52 AM EST = -24; signal line is -3 but algorithm says stay long
11/14/11; 9:30 AM EST = -8; signal line is -1 but algorithm says stay long
11/13/11; 7:00 PM EST = +6; signal line is +1
11/11/11; 10:00 AM EST = +6; signal line is +2
11/11/11; 9:30 AM EST = +6; signal line is +2; go long 1251; (Benchmark SPX for 2011=-0.6%)(Keybot this trade=+0.7%; Keybot for 2011=+24.3%)(Actual this trade via DOG=-1.0%; Actual for 2011=+28.9%)

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