Sunday, January 15, 2012


Keybot the Quant is long ahead of the new week of trading beginning on Tuesday (markets are closed on Monday). The algorithm has been flirting with moving to the short side but each time the algo number nears the signal line, the market bulls find a way to float the markets upwards, and Keybot remains long since 12/20/11.

Copper did the heavy lifting last week for the bulls.  The key item to watch at the open on Tuesday, and as the week moves along, is the SPX 1281 level, which is the 12-month MA. Market bulls have no concerns as long as the SPX stays above 1281. If the SPX fails the 1281 level, however, more than likely the downside will be strong and sustainable, and the quant will likely flip to the short side.

Watch the retail sector, RTH, since a fall from grace is anticipated which would negatively impact the broad markets. Watch commodities, CRB 313, now five points under and contributiing to the bear vibe in the broad markets. The NYA 7706 level is important as well. NYA is now at 7632. If the NYA gains 74 more points, this will embolden the market bulls and the broad indexes will be headed much higher.  If the NYA stays below, the bears benefit.

For the SPX on Tuesday, starting at 1289, if the bulls push higher and touch the 1295 handle, that will immediately accelerate a broad market upside move and the new week will be off to a happy start; the SPX should print 1300 in short order If the market bears come to play, however, and push the SPX lower to move under the critical 1281 level, markets should weaken noticeably.  The 1278 level should fall as well and if so, that would seal the deal for the market bears with sustainable downside likely moving forward.  A move thru 1282-1294 is sideways action. 

Only one pre-scheduled number prints during the week this week on Thursday morning at 9 AM.  Extreme caution is warranted. To keep the markets as simple as possible, market bulls win if the SPX stays above 1281, market bears will win if the SPX loses 1281.

1/22/12; 7:00 PM EST =
1/19/12; 9:00 AM EST =
1/15/12; 7:00 PM EST = +36; signal line is +22
1/13/12; 10:26 AM EST = +36; signal line is +22

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