Monday, January 23, 2012


Keybot the Quant remains long. The algo idled along all day after the three printouts earlier in the day.  Once the CRB rocked higher with a weaker dollar the bears were in for a long day.  Bears made the run lower, however, at noon, as measured by the SPX:VIX ratio 68 level.  Price came down to test, a failure would result in a large market sell off but the ratio instead bounced off the 68 level and the bulls were saved. Markets traveled upwards into the close.

Utilities, UTIL, are key this week, and a failure at 439 means big trouble for markets but at 449 now, over ten points higher, the bulls have their feet up on the desk, no worries.  The market bears need a strong dollar to bring copper, commodites and the markets lower.  The first sign of any market weakness should show up with the CRB falling below 310.40. Note that this level is lower than what the algo was targeting yesterday making it a wee bit more difficult for the bears.

For the SPX for Tuesday, starting at 1316, with doji candles on both the daily and weekly charts, the market bulls need to move up and over 1322, like today, and the upside will roar to life, with the broad markets accelerating in another leg up for the never-ending bull rally.  SPX would likely test 1326 in short order.  The market bears need to push the SPX under 1310, if so, the downside will accelerate, large block sellers will enter and the broad markets will drop several more handles in short order.  A move thru 1311-1321 is sideways action.

The markets are at a dangerous perch perhaps only a catalyst away from a wild move.  The dollar weakness and euro strength the last few days have provided the boost for the broad markets. Watch the dollar, CRB 310.40, UTIL 439, SPX 1322/1310 and SPX:VIX 68 to determine broad market direction. Stay on guard. 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
1/23/12; 8:00 AM EST = +64; signal line is +40

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