Monday, January 30, 2012


Keybot the Quant remains long. The algo printed a number at the opening bell, due to the weakness in the utilities, but the move lower for the algo number came up short of signaling Keybot to go short.  That flush move lower sucked in short sellers and then proceeded to rip their faces off in the afternoon.

UTIL under 453 is a huge feather in the market bears cap. Also of interest is the SPX:VIX ratio, now at 67.68, indicating a large down day ahead for tomorrow, and further market bearishness moving forward, unless the ratio pops up above 68. A key item to watch is the commodities index, CRB, which closed at 313.91. If the 310 level is lost, that should push Keybot to the short side. Thus, bears need to see a stronger dollar since this pushes commodities, copper, etc... lower.

For the SPX, starting at 1313, the market bulls only need three points higher, to move up and over 1316, and the upside will accelerate into a bull leg skyward. The market bears need to push under 1300.50, if so, the large block sellers will enter and the markets will accelerate strongly south to test 1295 in short order.  A move thru 1302-1315 is sideways action.

Keybot prints a pre-scheduled number at 10 AM tomorrow so the market action can be updated at that time.  Note that tomorrow is also the EOM so Keybot will also print a pre-scheduled number in the evening.  These pre-scheduled numbers are key since they help ratchet the signal line higher, thus, the quant could very well flip short sometime over the next day or two.  Stay on guard. Markets are highly unstable and exhibiting erratic action due to low volume trading.

2/5/12; 7:00 PM EST =
2/3/12; 9:00 AM EST =
1/31/12; 7:00 PM EST EOM =
1/31/12; 10:00 AM EST =
1/30/12; 9:30 AM EST = +48; signal line is +48
1/29/12; 7:00 PM EST = +64; signal line is +47

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