STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long. Markets are in a sideways pattern this week, one day opening higher only to fade away, another day opening lower only to recover. As Wednesday afternoon played out, you saw the SOX running upwards, the bulls trying to push SOX up and over the 418.50 level, but ran out of gas. On the other side, the bears were trying all day long to push JJC, copper, under 48.30, to usher in a market down leg, and succeeded in the morning only to fail at this task the rest of the day.

Thus, Thursday is set up for a big fight between JJC 48.30 and SOX 418.50. Watch them closely. If JJC drops under 48.30 the bears rule. If SOX moves up over 418.50 the bulls rule. If both maintain their current posture, the markets continue the sideways funk into the Friday jobs number tomorrow morning. Watch XLF 15.20 and VIX 18.10 as the day plays out as well.

For the SPX, starting at 1402, the market bulls need to touch 1405.50, about three points higher, and the upside will accelerate for the broad indexes.  The bears need to push eight points lower to that critical support at 1394, if lost, the broad markets will accelerate lower. A move thru 1395-1404 is sideways action.  The futures, at this writing, show that the SPX will be up two or three points at the open which is short of the bullish goal.

JJC and SOX carry clout today.  The dollar is up right now, albeit by a smidge, so this will help to apply pressure on commodities and copper, and in turn, equities.  Copper is trading lower right now, down about 0.74%. Thus, if you apply this percentage to JJC to forecast an early read on the action, JJC closed at 48.44, 0.75% is about 35 to 40 cents, so JJC should trade in the low 48's after the opening bell which favors the market bears for today. If JJC fails at the open, watch SPX 1394 since bulls will try to stop the market slide.  If 1394 fails the bulls will likely lose control of the markets and Keybot will be very close to flipping back to the short side.

5/6/12; 7:00 PM EST =

5/4/12; 9:00 AM EST =

5/2/12; 10:40 AM EST = +46; signal line +27

5/2/12; 10:00 AM EST = +30; signal line +26