Tuesday, December 20, 2011


Keybot the Quant is long as of this afternoon. Tomorrow we will find out if the market bull has legs. Financials were the key as the XLF punched up into the 12.70's. The algo is fixated on XLF 12.71. XLF is at 12.72, one measley penny to the bull side which is providing broad market bullilsh support, so you can see how shaky it all is.  Watch XLF 12.71 at the open tomorrow, it will immediately tell the story.

For the SPX for Wednesday, starting at 1241, if the maket bulls can continue the fun and touch the 1243 handle, the large block buyers will enter, shorts will cover, and another upside orgy will occur in the broad markets. The market bears need to drive the SPX all the way back down to 1205 to get the market negativity to return so this is unlikely. Instead, the bears will simply try to halt the market upside move by spanking financials back down, so watch XLF 12.71 closely. Key SPX S/R is 1258, 1252, 1247, 1240, 1235, 1227, 1225 and 1220.

The algo is very active this week printing out nine numbers in two days of trading. Typically, seasonality-wise, Keybot should be idling thru this holiday week with little action. This market behavior shows that the broad indexes are very unstable and require continued close monitoring. The caution flag is out.  Expect the unexpected moving forward.

1/1/12; 7:00 PM EST EOM EOQ4 EOY2011 =
12/27/11; 10:00 AM EST =
12/25/11; 7:00 PM EST =
12/22/11; 10:00 AM EST =
12/20/11; 2:49 PM EST = -10; signal line is -17; go long 1240; (Benchmark SPX for 2011=-1.4%)(Keybot this trade=-0.5%; Keybot for 2011=+31.2%)(Actual this trade via RWM=-1.5%; Actual for 2011=+35.5%)
12/20/11; 2:32 PM EST = -10; signal line is -17 but algorithm says stay short
12/20/11; 9:30 AM EST = -26; signal line is -16

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