Tuesday, January 17, 2012


Keybot the Quant is long but caution is required. The algorithm has been long since 12/20/11, almost one month, but now the markets appear toppy.  The NYA moving above the 40-week MA was very important today but price failed in the afternoon. Watch NYA 7688. The NYA is now at 7670, eighteen points under and contributing to market bearishness.

Watch the CRB 311.50 level tomorrow as well.  CRB is now at 310.83, only 67 cents on the bear side adding to overall market bearishness. If NYA and CRB stay bearish, the broad markets should drift lower. If the indexes sell off tomorrow, watch SPX 1281 where substantail market failure would occur. For the market bulls, either the NYA or CRB or both need to move above the levels listed since this will create further broad market buoyancy.

For the SPX tomorrow, starting at 1294, the market bears have the wind at their back since they pushed the indexes lower into Tuesday's close. If the market bears push lower by only 3 points and drop under the 1290 level, the large block sellers will enter the markets in force.  The SPX will drop in quick order more than likely on its way to test 1281 in short order. SPX 1281 is critical, if lost, the markets should fall into extreme stress. If the market bulls, however, instead push higher to touch the 1303 handle, the upside will explode into a buying frenzy and the broad markets will make their way much higher. A move thru 1292-1302 is sideways action.

Do not fall into complacency like the broad markets have over the last few days. Keybot remains on edge anticipating a trend change at anytime. If the SPX loses 1281, Keybot will likely flip to the short side.  Caution is warranted.  Stay alert. NYA 7688 and CRB 311.50 will quickly tell the tale in the morning. If weakness appears in the indexes, watch SPX 1281 like a hawk.

1/22/12; 7:00 PM EST =
1/19/12; 9:00 AM EST =
1/17/12; 2:35 PM EST = +36; signal line is +23
1/17/12; 9:32 AM EST = +50; signal line is +23
1/15/12; 7:00 PM EST = +36; signal line is +22

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