Keybot the Quant remains long after a hectic start to the Thursday session. Markets are weak after Draghi (ECB) failed to deliver the goods he promised last week. Interestingly, the algorithm positioned itself to go short after the open but would not receive confirmation from other programming rules. Financials are weak today which is playing a major role in the market weakness. Volatility, the VIX, however, fell below the 18.80 level identified by the algo, so the markets recovered off the bottom. The VIX is under 18 now which causes bulls to breathe a sigh of relief and not worry about the downside. Note how the NYA came down to test the algo's targeted number at 7760, and bounced.
Remain cautious; markets are unstable and erratic. If the VIX can recover back above 18.80, and the SPX takes out today's low of 1361.26, Keybot will likely flip short. Keybot willl not flip short today if the SPX stays above 1361.26. The bulls remain in control and the quant may motor along today on the long side into the important Jobs Report number tomorrow morning.
8/5/12; 7:00 PM EST =
8/3/12; 9:00 AM EST =
8/2/12; 9:39 AM EST = +44; signal line is +33
8/2/12; 9:37 AM EST = +30; signal line is +32 but algorithm says stay long
8/1/12; 3:59 PM EST = +46; signal line is +31
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