Thursday, January 5, 2012


Keybot the Quant remains long despite the pre-market excitement today.  After the open, the SPX dropped thru the 1268 level ushering in further weakness but the tell was the semiconductors.  Instead of the SOX dropping under the 367.85 level to accelerate the market selling, it jumped higher and finished the day at 374.17 almost seven points above any danger. The retail sector, RTH, was weak on the lower TGT news but remained above the 110.25 danger line.

Thus, the market bears had no oomph and the broad indexes floated upwards.  Once SPX 1278-1279 resistance gave way the upside accelerated. The SPX closed above the 12-month MA which is extremely important. This represents a secular bull-bear line and the SPX closed a hair above on the secular bull side for the first time in five months.  Watch SPX 1280.33 (12-mth MA) closely tomorrow.

Copper and commodities remain weak due to the stronger dollar. Watch SOX 367.85, RTH 110.25 and CRB 314.26.  For the SPX, starting at 1281, market bulls only need to push upwards a couple of points, up and over 1283, to accelerate the upside and party into the weekend.  The market bears need to push 16 points lower to 1265 to start the negative momo again, a formidable task. A move thru 1266-1280 is sideways action.

The jobs circus is on tap in the morning. Consensus has turned more bullish after the ADP Employment data this morning. The futures will obviously react. Keybot has a pre-scheduled printout at 9 AM so that will serve as a market update in front of Friday's action. For now, Keybot remains on the long side.

1/8/12; 7:00 PM EST =
1/6/12; 9:00 AM EST =
1/5/12; 3:40 PM EST = +20; signal line is +6
1/5/12; 2:27 PM EST = +6; signal line is +5
1/5/12; 1:25 AM EST = +20; signal line is +3
1/4/12; 2:40 PM EST = +6; signal line is +1
1/4/12; 10:10 AM EST = -10; signal line is 0 but algorithm says stay long
1/4/12; 9:42 AM EST = +6; signal line is -2

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