Thursday, October 18, 2012

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long going into the Thursday session. The algo did not print any numbers during yesterday's trading session.  The utilities sector exploded higher with UTIL closing at 485.85. The bull-bear line of interest this week is 478.43 so the bulls are handily above. More importantly, as mentioned on the weekend, the number for all next week is 485.67. Thus, UTIL has now recovered and is above the number it needs for next week to contribute bullishly to markets. This development strongly encourages the bulls. The week is far from over. Watch the UTIL 485.67 very closely into the Friday close.

In three short days the bulls have turned gloom into happiness. China GDP drops for the seventh quarter in a row last night but beat estimates. Copper is flat so the affect on JJC may be muted.  The bulls are driving the bus and it appears the best chance for bears is to push JJC under 46.30, or RTH under 44.45, or VIX above 16.50. Otherwise, the bulls remain in control. In addition, the only negative sector is semiconductors so if the bulls push SOX above 386 (now at 379.41), this will verify an extended bull rally that will send the SPX above the highs for the year in the days ahead.  If SOX stays under 386, the market bears remain in the game waiting for their chance.

For the SPX today starting at 1461, the bulls are once again in the driver's seat to start the day only needing a single point higher at the open, to punch up thru 1462 and an upside acceleration will occur which will test this year's closing high at 1465.77.  The bears need to push under 1453 to initiate a downside acceleration. A move thru 1454-1461 is sideways action. Focus on UTIL 485.67 and SOX 386. Remain cautious.

10/21/12; 7:00 PM EST =
10/17/12; 9:00 AM EST = +60; signal line is +57

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