Tuesday, February 14, 2012


Keybot the Quant remains long for eight weeks straight now, since mid-December. The robot moved from sometimes chaotic hyper daily activity, with as many as a dozen numbers printing out in any given day, in the Fall, to now a calm, steady-eddy two-month bull run. Those of you watching yesterday witnessed the high drama play out with the bulls and bears fighting over UTIL 451.17, and the market bears won out as the Monday session finished. The algo idled along sideways and did not print any numbers.

Moody's rating agency downgraded Italy, Portugal and Spain last evening so Asia stocks were lower on reduced growth prospects. This sets up the potential for exciting action in the commodites and copper markets today; two key areas that Keybot is now fixated on. For today, UTIL 451.17, CRB 311.20, JJC 48 and VIX 25 all figure prominently. Note that Keybot ratcheted up the CRB number again, and the VIX down, which actually makes these threshholds easier to cross for the market bears; the quant is constantly recalculating hte trigger targets. Utilities are currently creating market bearishness, but the commodites, copper and volatility (that remains low relatively) are currently keeping markets on the bullish side. 

For the SPX, starting at 1352, if the market bulls can push up and touch 1353.50, the upside will accelerate and the never-ending bull market will continue higher. The market bears need to lose the 1343 handle to return the markets to accelerated downside negativity.  A move thru 1344-1352 is sideways action. S&P futures at this writing show the SPX wants to begin the day about two points higher, which sets up drama at the 1353-1354 level at the bell, but the open is four hours away.  Markets remain extremely unstable and erratic.  Keybot is chomping at the bit to go short, and the algorithm is positioned to go short as soon as a few additional internals signals line up, but, for now, the algo remains on the long side. Commodities and copper are very important today. 

2/19/12; 7:00 PM EST =
2/16/12; 9:00 AM =
2/12/12; 7:00 PM EST = +48; signal line is +49 but algorithm says stay long
2/10/12; 10:00 AM EST = +48; signal line is +49 but algorithm says stay long

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