Thursday, May 31, 2012

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short. The RTH tumbled under 41.16 at the open and continued well under 41 before recovering as happy Euro news hit the wires. The algo number is now above the signal line so the quant is chomping at the bit to go long but internal programming rules are holding it back, keeping it on the bear side.  One of the key items that would have to line up is the SPX will need to take out yesterday's highs at 1331.25. The SPX is currently printing 1312 well below so the quant has no intentions of flipping long, for now.

This is high drama and shows that the bulls and bears are fighting intensely ahead of the Jobs Report in the morning when the die will be cast.  Watch RTH 41.16. This retail sector carries serious clout right now more than any other sector.  The RTH is a hair above as this message is typed. If the RTH falls below 41.16 you will see the markets deteriorate. The markets will stay buoyant if the RTH stays above 41.16.

6/3/12; 7:00 PM EST =
6/1/12; 9:00 AM EST =
5/31/12; 7:00 PM EST EOM =
5/31/12; 12:26 PM EST = -14 signal line -15 but algorithm says stay short
5/31/12; 9:30 AM EST = -30 signal line -14
5/30/12; 3:25 PM EST = -14 signal line -14

2 comments:

  1. Does the Quant like to see signal line in the positive territory before going long or is it not a requirement for going long?
    thanks.

    ReplyDelete
  2. Hello Anon, great question, positive or negative numbers have no impact on the quant flipping sides. It is simply the relationship between the algo number and signal line so with the algo number at -14, that number ishigher than -15, so the quant wants to go long. There are other programming rules, however, holding it back. RTH 41.16 is key since Keybot is locked on to it and giving it a high priority.

    The program is an oscillator at its basic level, so in general, markets are on the sick side when the algo number is under zero and generally more healthy on the positive side.

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