STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short and does not print any numbers today although this masks the intense action going on behind the scenes for the algorithm.  The bears now have the commodities, utilities, copper and semiconductors firmly in hand. A market leader, Dr. Copper, collapsed on the gurney today falling over 2%. The algorithm is now tracking volatility, financials and retail. The markets will take another leg down if either the VIX moves above 19.40 (now at 18.81 nearly touching 19 today), the XLF drops under 15.15 (now at 15.30), or the RTH drops under 40.80 (now at 41.37).

For the SPX on Tuesday, starting at 1382.20, the bulls are simply trying to stop the downward slide. That can be accomplished if the bulls prevent the VIX, XLF and RTH levels shown above from triggering. The bears need to push four points lower after the open, to drop under 1378.25, and the downside selling will accelerate, opening the door to a failure by VIX, XLF or RTH.

Markets remain unstable. Four sectors represented by CRB, UTIL, JJC and SOX are firmly bearish and will continue to create broad market negativity moving forward. The critical SPX 1388-1389 support level failed. The 1370-1372 support area is an important line in the sand that includes the 50-day MA.

4/15/12; 7:00 PM EST =

4/13/12; 10:00 AM EST =

4/8/12; 7:00 PM EST = +14; signal line is +43

4/6/12; 9:00 AM EST = +14; signal line is +44