STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long. Yesterday was set up for the bulls, and they ran in the opening minutes but quickly stumbled as the markets cascaded lower from the 1336 high to the 1309 close, a 27 point intraday drop.  The interesting aspect is that the retail sector, RTH, that continues to be a major focus of the quant, sold off but not far enough to prompt Keybot to move to the short side. Watch RTH 41.08, now at 41.17. If 41.08 is lost, Keybot will be on the verge of flipping short. The utilities rolled over as well yesterday. Pay attention to UTIL since if the utes start to lead the market lower, that means a serious down trend is taking shape for markets.

For the SPX starting at 1309, the bears have the easier road since price closed near the lows. If the bears can push the SPX under 1308, the markets will accelerate lower to likely test 1300.  More importantly, if the RTH drops under 41.08, and the SPX drops under 1308, Keybot will be moving to the short side if not already there.  The bulls will try to stop the downside momo by preventing the RTH from losing 41.08 with all their might. A move thru SPX 1309-1333 is sideways action today. To add more drama, Retail Sales data is released tomorrow, Wednesday, which will decide the fate of RTH.  The caution flag remains out in these treacherous markets. Keybot did not print any numbers yesterday despite all the bearish market action.

6/17/12; 7:00 PM EST =

6/15/12; 10:00 AM EST =

6/10/12; 7:00 PM EST = -14 signal line -23

6/6/12; 11:02 AM EST = -14; signal line is -23; go long 1305; (Benchmark SPX for 2012  = +3.7%)(Keybot this trade = +5.6%; Keybot for 2012 = +7.2%)(Actual this trade = +5.4%; Actual for 2012 = +7.4%)

Note Added 6/12/12 at 11:20 AM:  High drama today as the RTH dropped lower and the SPX tested 1308, dropping under but only for three minutes. Ratchet up the RTH level of interest to 41.10. RTH is now printing 41.45 well above providing the bulls some street cred.