Monday, January 9, 2012


Keybot the Quant finished the day on the long side. The bulls did not have the strength to move above 1282 and signal an upside acceleration. The bears did not have the strength to move below 1273 and signal a substantial and sustainable downside move. Thus, the five or six point tight range of 1275-1281 held the entire day. The SPX closed above the 12-month MA by a few pennies which is a feather in the bulls cap.

Tomorrow we pick up where things left off.  If the SPX, starting at 1280.70, touches the 1282 handle (watch to see if the futures are a couple points on the green side overnight), the market bulls will receive strong upside acceleration. Much of today was spent at the bull end of the 1275-1281 range and that actually provides the bears an easier downside target to hit tomorrow as compared to today.  For the Tuesday session, if the SPX drops under 1274.50 (watch to see if the futures are six points on the red side overnight), the downside floodgates will open in full force. Large block sellers will slap these markets south in a sustainable bearish move down. Thus, for tomorrow, watch SPX 1282.00 and 1274.50 to see if the market bulls, or bears, respectively, win.

If the SPX drops under 1275 tomorrow, Keybot will likely flip to the short side. Use this as the rule of thumb for Tuesday's session. Markets remain unstable.

1/15/12; 7:00 PM EST =
1/13/12; 10:00 AM EST =
1/9/12; 2:03 PM EST = +20; signal line is +12
1/9/12; 10:39 AM EST = +6; signal line is +12 but algorithm says stay long
1/9/12; 10:27 AM EST = +20; signal line is +12

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