Wednesday, February 29, 2012


Keybot the Quant remains long after the pre-scheduled number prints this evening with no change for the algo number but another tick higher occurs for the signal line.  Keybot remains on the edge of going short but today's market negativity did not offer a firm direction for bears.  The SPX broke thru the 1373 level so 1377 R was tested, where the SPX fell on its sword, and rolled over. The 1365 level broke in the final hour, which is what the bears needed to create a thrust move lower, but afer a few minutes, the SPX popped back above.

Watch the VIX 23 level and higher to indicate serious market bearishness. The VIX closed one penny above its 20-day MA at 18.42 which is a bullish development for VIX, bearish for markets.  Use the VIX 20-day MA as a gauge for markets tomorrow, above 18.42 and market bears are happy, below 18.42 and market bulls are regaining market control, under 18 and bulls place their feet back up on the desk, and light a cigar. Watch commodities, CRB, the 313 level, now at 321.  Remember when CRB was important a week or two ago, then it broke out to the upside signaling more bullish upside? Well time to start watching CRB again, especially in light of the dollar bounce today. The CRB under 313 signals major market trouble and would likely lead to Keybot going short.

For the SPX for Thursday, starting at 1365, the market bears have the ball, do they fumble or start driving markets lower? The bears need to push the SPX only two points lower to lose the 1364 handle, if so, the bears are going to be exploring lower market levels in short order. The SPX would quickly test the 10-day MA at 1362-ish and likely fail. The bulls need to recover today's drop and then some, to touch the 1378 level, about 12 points higher, to regain control. A move thru 1365-1377 is sideways action. Listen for the China PMI numbers which will effect copper and commodities markets. The market instabilty highlighted each day here finally started to show its ugly face today.  Stay on guard.

3/4/12; 7:00 PM EST =
2/29/12; 7:00 PM EST EOM = +76; signal line is +65
2/28/12; 10:00 AM = +76; signal line is +64
2/26/12; 7:00 PM EST = +76; signal line is +63

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