Tuesday, January 24, 2012


Keybot the Quant remains long and motored along all day without printing any numbers.  The SPX fell thru 1310 so price accelerated down to 1306 but after the first ten minutes of trading, trended up the rest of the day.  The CRB, commodities, remains elevated and served to keep the bulls buoyant.  The CRB is now 314.69 well above the algorithm level of interest now at 310.40, so the bulls are in clover. The SPX:VIX ratio fell under 68 indicating a large sell off on tap but managed to move back above in the afternoon.

Utilities are key this week as discussed on the weekend.  The danger level for markets is if the UTIL falls under 439.  If so, the broad markets are in serious trouble.  UTIL is sporting a 446 handle now and the low today was a 445 handle. These numbers are close enough to 439 to now create concern.  The algorithm will react very negatively should the UTIL 439 level fail.

For the SPX for Wednesday, starting at 1315, the market bulls have the wind at their backs. One measley point higher is all that is needed to ignite another strong leg up for the markets.  If the SPX touches the 1316 handle, the upside will accelerate strongly with the SPX moving back up towards 1322, perhaps 1326.  Thus, if the futures are green, and with the blow-out AAPL earnings you would think that to be a strong possibility, the bulls will be dancing to victory again.

The market bears need to push nine points lower to lose the 1306 handle.  If so, the bears will receive the downside momo they desired today but did not attain. SPX 1300 would be tested in short order and more than likely prints in the 1290's would appear.  A move thru 1307-1313 is sideways action.

In a nutshell, focus on SPX:VIX 68, UTIL 439, CRB 310.40 and SPX 1316/1306 to determine broad market direction. Markets are highly unstable.  Extreme caution is required. Expect the unexpected.

1/29/12; 7:00 PM EST =
1/27/12; 10:00 AM EST =
1/23/12; 9:33 AM EST = +64; signal line is +43
1/23/12; 9:21 AM EST = +50; signal line is +41

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