Tuesday, June 26, 2012

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. The algo dropped further at yesterday's open forecasting further market weakness. The drop in the retail sector and spike higher in volatility contributed to the broad market move lower. For today, watch RTH 41.27, now at 40.99. As long as the RTH stays under 41.27, the market bears are fine, a move above and the bulls will bring positivity back into the markets.   Watch VIX 18.90, now at 20.38. As long as the VIX stays above 18.90, the bears are taking markets lower. Bulls can only move markets higher if the VIX drops under 18.90. For the bears to make further headway south, watch SPX 1292. The SPX is now at 1314 only 12 points higher. If 1292 breaks, all Hades will break loose in markets and this will surely lead to QE3.

For the SPX for today, the bulls need to touch the 1335 handle to reignite market positivity but this is a tall task. Therefore, the bulls will simply try to stop the bleeding and accomplish that if they can move the VIX below 18.90 and/or the RTH back above 41.27. The bears need to push under 1309, if so, the markets will accelerate lower, the strong 1307-1308 support will give way quickly and the SPX will move towards 1305, then the psychological 1300. 1295-1296 is the last gauntlet of strong support before the test of the important 1292 would occur where the fate of the markets would hang in the balance. A move thru 1310-1334 is sideways action.

Note that the caution flag is removed. With the algo number now 37 points under the signal line, the bears are cruising. Keybot prints a pre-scheduled number at 10 AM so the market action can be updated at that time.

7/1/12; 7:00 PM EST EOM EOQ2 EOH1 =
6/29/12; 10:00 AM EST =
6/26/12; 10:00 AM EST =
6/25/12; 9:30 AM EST = -30 signal line +7
6/24/12; 7:00 PM EST = +0 signal line +8
6/22/12; 3:59 PM EST = +0 signal line +8

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