Wednesday, February 15, 2012


Keybot the Quant remains short.  That is odd to say considering for the last two months each missive began with another day of Keybot remaining long.  The algo did not print any numbers today. A whipsaw did not occur which was surprising considering all the bullishness with the futures and the happy start to the session. Problems were apparent from the start for the bulls, however, with the utilities weak, volatility moving up, the SPX:VIX dropping under 68 and other indicators.  AAPL provided the buoyancy to hold the markets in check, but then once Apple rolled over, the broad markets crumbled lower.

The aglorithm came within seconds of moving back to the long side at noon time today as the SPX printed highs at 1355 and change.  Price has to maintain a level set by the algo for a set amount of minutes and Keybot came within seconds of a whipsaw before the SPX price collapsed and then fell all afternoon into the close. Truly remarkable to witness the behavior of Keybot. The robot's are smarter than the human's.

The market bulls must move UTIL, the utilities sector, above 451.17 to move the markets higher. As long as the market bears keep UTIL under 451.17, the bulls have hit a ceiling in the markets. The bears need to push either the CRB lower, thru 311.40 (now at 314.95), or the JJC lower, thru 48 (now at 48.99). A higher dollar will push the CRB and JJC lower. Watch the JJC closely since a loss of the 48 level will open up extended downside and bearish action.

For the SPX for Thursday, starting at 1343, the bears finally have some wind at their backs.  All the bears need is two and one-half points lower, to push under 1340.80, to accelerate the broad markets lower. Bulls are on their heels now so they are simply trying to stop the drop by keeping copper buoyant and the SPX above 1341.  A move thru 1342-1354 is sideways action. SPX 1337 is strong support.

A pre-scheduled number prints at 9 AM but it should not have an impact on Keybot.  Markets remain unstable, stay cautious. For now, the bears are running.  If tomorrow goes by with the quant remaining short, the bears should have legs for a few days.

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%)

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