Tuesday, December 13, 2011


Keybot the Quant is short as Tuesday begins.  The algorithm flipped to the bear side yesterday when copper, financials and semiconductors collapsed. The algo did not print out any additional numbers the remainder of the day. Continue watching SOX 371.30, XLF 12.82 and JJC 45.40. If broad markets remain weak, watch the RTH 110-ish level; closing yesterday two points above and continuing to help support the broad indexes.  Retail sales data hits at 8:30 AM as well as Best Buy earnings and this will set the market tone.

For now, the bears are tying to make a push lower. The market bulls need to boost SOX, XLF and JJC again, otherwise, they will lose their grip. For the SPX today, starting at 1236, hanging on to that critical strong 1235 support, if the 1255 handle is touched, 20 points higher, this will launch a large upside move and signal that the market bulls have regained control. The bears have an easier road to hoe since a move down to 1227 will cause the indexes to tumble much lower. A move thru 1228-1254 is sideways action.

Today we see if Keybot whipsaws back to the long side or if the algo is content with motoring along on the short side for a while, thus, the caution flag remains out. Markets should be jumpy all day long into the Fed announcement at 2:15 PM.

12/18/11; 7:00 PM EST =
12/12/11; 10:25 AM EST = -26; signal line is -6; go short 1234; (Benchmark SPX for 2011=-1.9%)(Keybot this trade=+3.4%; Keybot for 2011=+31.7%)(Actual this trade via IWM=+4.7%; Actual for 2011=+37.0%)
12/12/11; 10:20 AM EST = -26; signal line is -6 but algorithm says stay long
12/12/11; 9:30 AM EST = -10; signal line is -6 but algorithm says stay long
12/11/11; 7:00 PM EST = +22; signal line is -7

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