Tuesday, February 28, 2012


Keybot the Quant remains long. The algo idled along calmly today after the 10 AM number without printing any activity. The SPX closed above the intraday 2011 high of 1370.58, a big feather in the bull's cap. Of interest is that the breach of 1272 should have catapulted the SPX towards 1377 R but instead it barely had the gas to move thru 1373 before pulling back.

What a rally, from SPX 1200 to SPX 1372, let's call it 175 points, since mid-December, eleven weeks.  That is 16 spoo points per week, week after week, from December thru almost March. Very impressive and the market bulls must be given their due. The major sectors remain bullish, sans trannies, and volatility remains low. The driver overnight tonight is the LTRO2 news, tentatively hitting the futures markets at 5 AM EST, about ten hours away as this is written.

If the SPX, starting at 1372, gains one point and stays above 1373 for five or ten minutes tomorrow, the bulls will launch another upside run, attacking the 1377 R. The market bears need to drop under the 1365 handle to ignite the short side. A move thru 1366-1372 is sideways action. Note that with the LTRO2 news known in the morning before the U.S. open, the fate of the markets will likely be decided before the bell rings.

The bulls remain in control.  Watch RTH 39 and XLF 14.40 but the bulls are comfortably cruising well above these critical levels. Perhaps GS's announcement that it received a Wells Notice will weaken financials.  Markets remain highly unstable and appear frothy but Keybot remains long.  Trading tomorrow and Thursday may prove quite dramatic.

3/4/12; 7:00 PM EST =
2/29/12; 7:00 PM EST EOM =
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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