Wednesday, July 25, 2012

STOCK MARKET BEARISH -- SHORT

Keybot the Quant is short and idled along all day without printing any numbers, unimpressed by today's market action.  The market bears need to drop the CRB under 293 to create another leg lower. The bulls must send the RTH back above 41.90 or the VIX under 18.75 if they expect to mount a recovery rally.

For the SPX starting at 1338, the bulls need to touch the 1344 handle to ignite an upside market acceleration.  The bears need to push under 1331.50 and a downside acceleration will occur.  A move thru 1333-1343 is sideways action.The bears are cruising. Markets remain erratic and unstable.

7/29/12; 7:00 PM EST =
7/27/12; 10:00 AM EST =
7/24/12; 11:59 AM EST = -16; signal line is +28
7/24/12; 9:30 AM EST = +0; signal line is +30

Note Added 7/26/12 at 9:08 AM EST:  Overnight is a lifetime in trading.  The markets were rolling over this morning when Draghi (ECB) stepped in announcing that he will do whatever is necessary to support the euro.  The futures markets are catapulting higher on news of stimulus coming, and the short-covering will provide further fuel for a strong move higher. Keybot may turn to the long side.  Use RTH 41.90, XLF 14.45, SOX 374, JJC 44.20, NYA 7753 and VIX 18.70 to determine market direction after the intial pop.  If three of these six parameters flip to the bull side, Keybot will likely flip to the long side. Lots of excitment is on tap. A turn may be imminent and occur after the open.

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