STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is short. The bears are in control now. The algo finished the day without printing any further numbers. Do the bears push markets far lower tomorrow, or, whipsaw, folding like a cheap suit? The bears will maintain downward pressure on the broad indexes as long as UTIL stays under 478.48. Keybot is also tracking UTIL 462.21 (the 50-week MA). The broad indexes will be tumbling rapidly lower if UTIL 462.21 fails. The quant is also tracking semiconductors closely again, the level of interest is SOX 396.  SOX is now at 402.48, about six and one-half points above, in the bull camp, influencing markets positively. If SOX 396 fails, the markets will sell off strongly.  VIX 17.85 is also of interest to the algo but less so than UTIL and SOX. If VIX moves above 17.85, the markets will take another leg lower. Bulls need to keep the VIX below 17.85.

For the SPX on Tuesday, starting at 1461, if the bears can push under 1457.50, the bears will accelerate the downward party. The bulls need to touch the 1466 handle to initiate an upside acceleration.  A move thru 1459-1464 is sideways action. Exercise caution. If the bulls plan on reversing Keybot's bearish move today, they will likely do it at the open with a large up. Barring that, as time moves along, the bear direction will become more palatable to traders. Stay cautious.

9/23/12; 7:00 PM EST =

9/19/12; 9:00 AM EST =

9/17/12; 2:11 PM EST = +60; signal line is +62; go short 1460; (Benchmark SPX for 2012 = +16.1%)(Keybot this trade = +4.1%; Keybot for 2012 = +14.7%)(Actual this trade = +4.2%; Actual for 2012 = +7.7%)