Tuesday, February 28, 2012


Keybot the Quant remains long. The algo idled along yesterday without printing any numbers. The drop in the indexes after the open did not impress Keybot; the majority of market sectors remain elevated. The algorithm is currently watching the following levels for several key sectors so pay attention to these numbers; SOX 412, RTH 39, XLF 14.40 and JJC 48.50. Volatility, VIX, requires close watching as well. VIX closed above 18 yesterday. Today will be a resumption of the fight for the 20-day MA at 18.54. Market bears win if the VIX moves above 18.54 while bulls stay in control under 18.54. Even if the VIX moves above 18.54, bulls will only develop serious concern if VIX 23 is taken out.

Thus, the bulls are at cruise altitude as they try to burn off negative energy by moving the markets sideways.  For the SPX starting at 1368 today, the bulls need to touch 1372, if so, the bulls will enjoy an upside acceleration.  The price behavior at the 2011 intraday high at 1370.58 is important.  Futures project about a six point gain at the open currently, which easily overcomes 1372, so the bulls appear in good shape, but the U.S. open remains over four hours away.

Keybot prints a pre-scheduled number at 10 AM and this is expected to be a market pivot point, thus, if markets are up going into 10 AM a reversal may occur, or visa versa. The broad markets can be reassessed at that time. The market bears need to push the SPX down to lose the 1355 handle, which was yesterday's low support test, if they want to ignite negativity. A move thru 1356-1370 is sideways action.

3/4/12; 7:00 PM EST =
2/29/12; 7:00 PM EST EOM =
2/28/12; 10:00 AM =
2/26/12; 7:00 PM EST = +76; signal line is +63
2/24/12; 3:05 PM EST = +76; signal line is +62

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