STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long going into the Wednesday Fed day. The algo printed one number before the close and the standard pre-scheduled month-end number printed a short time ago. The upside has been held back this week by the JJC not moving above 44.20. Copper was the major sector that did not participate in the market move higher and the doctor typically leads.  Today, the bears flexed their muscles pushing the VIX above 18.80. Watch this closely tomorrow as the opening bell rings.

The algorithm may be close to flipping short; tomorrow may be an exciting day. The VIX moving above 18.80, which signals market bearishness, may signal the start of market trouble moving forward.  Other areas and levels of interest the quant is tracking are SOX 376 (now at 384 causing market bullishness), RTH 42.15 (now at 42.88 causing market bullishness), XLF 14.45 (now at 14.66 causing market bullishness, VIX 18.80 (now at 18.93 causing market bearishness) and NYA 7760 (now at 7860 causing market bullishness). Any changes to these parameters will push the broad indexes in that respective direction.  If two or more of the bullish parameters move to the bear camp, it is very likely that Keybot the Quant will flip to the short side, so stay on guard tomorrow.

For the SPX starting at 1379, the bears have the momo since they closed the SPX at the lows.  Any little smidge of red in the futures overnight will create a downside acceleration at the open. The bulls need to touch the 1387 handle to accelerate the upside.  A move thru 1380-1386 is sideways action.  Pay close attention to SPX 1379 and VIX 18.80.  Extreme caution is warranted.

8/5/12; 7:00 PM EST =

8/3/12; 9:00 AM EST =

7/31/12; 7:00 PM EST EOM = +46; signal line is +27

7/31/12; 3:59 PM EST = +46; signal line is +27

7/31/12; 10:00 AM EST = +60; signal line is +26