Tuesday, February 14, 2012


Keybot the Quant turns to the bear side today.  The new year is now officially kicked off with Keybot performing the first trade of the year, six weeks into the year. The late day drama pushed the SPX:VIX ratio back above 68 in the final minutes favoring market bulls again. Watch to see if the ratio loses 68 tomorrow which would signal a large down day on tap.

UTIL closed at 450.32, only 85 cents under the critical 451.17 that will firmly place the market bulls back in business again. Copper, JJC, closing at 49.18, requires close watching since it is very near the 48 level that Keybot is monitoring. JJC losing 48 is very bearish for markets.  CRB is at 313.95 comfortably above 311.30 which would usher in significant market bearishness. Volatility is drifting higher. The VIX is at 19.54 and needs 25 to favor the market bears.

For the SPX for Wednesday, starting at 1350.50, the bulls only need one measley point higher, to move up and over 1351.30 and the markets will be off and running to the upside again.  The market bears need to keep the futures red and to push the SPX back down to lose the 1341 level; this would accelerate the broad market selling.  A move thru 1342-1350 is sideways action.

If Keybot touches SPX 1355.42 tomorrow, the algo will probably whipsaw back to the long side. Markets are erratic, stay on guard, the caution flag remains out. Wednesday we find out if Keybot is whipsawed, or not.

2/19/12; 7:00 PM EST =
2/16/12; 9:00 AM =
2/14/12; 2:30 PM EST = +48; signal line is +49; go short 1342; (Benchmark SPX for 2012  = +6.7%)(Keybot this trade = +6.7%; Keybot for 2012 = +6.7%)(Actual this trade = +10.2%; Actual for 2012 = +10.2%)
2/12/12; 7:00 PM EST = +48; signal line is +49 but algorithm says stay long

Note Added 2/15/12 at 12:06 PM: Keybot now in the neighborhood where a whipsaw may occur, it's deciding now.

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