Sunday, January 22, 2012


Keybot the Quant remains on the long side, for about five week nows.  The immediate initial read on the broad markets Monday morning starts with the commodities.  If the CRB remains under 311.50, the bears can stop the upwards market move.  Thus, watch the dollar; up dollar = down markets and down dollar = up markets.  Keybot is also focused on the utilities, UTIL, the 439 level, 438.76 to be exact.  If that level is lost, the broad indexes will be in serious trouble.  If UTIL maintains 439 or higher, now at about 448, the market bulls will be whistling along without a care in the world.

Market bulls are in good shape unless the SPX 1283 level and/or NYA 7690 level is lost. This represents the 12-month MA for SPX and the 40-week MA for NYA, two key secular market signals, and the bulls have regained these levels during this recent rally. The SPX 1283 is especially key for the month-end print, on Tuesday, 1/31/12, since the number will be cast in concrete. If the bears want to fight back they need to bring it this week.

Specifically, for Monday, for the SPX, starting at 1315, if the futures are green, even only pennnies on the green side, the bulls are going to enter the markets in force from the get-go with the broad indexes moving up strongly.  The market bears need to keep the futures red at all costs.  Additionally, the bears must push the SPX six points lower, to lose the 1309 handle, if so, the broad markets will fall several more handles in quick order, the SPX will likely then test 1300.  A move thru 1310-1314 is sideways action but very unlikely considering the tightness of the range.  Therefore, the bulls win with green futures, or, the bears win under 1309.

The algo number is only 12 points away from the signal line so a trend change may occur at any time.  Markets remain highly unstable.  Expect the unexpected.  Caution is warranted. Keybot prints out only one pre-scheduled number this week on Friday morning.

1/29/12; 7:00 PM EST =
1/27/12; 10:00 AM EST =
1/22/12; 7:00 PM EST = +50; signal line is +38
1/20/12; 8:00 AM EST = +50; signal line is +36

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