STOCK MARKET BULLISH - -LONG -- CAUTION

Keybot the Quant is long going into the Friday session.  The move higher in the utilities sector with UTIL now over 487 places this sector firmly in the bull camp and contributing bullishly to markets. The quant will be tracking UTIL 485.67 all next week so pay attention to this number today, especially at the close. If UTIL ends today under 485.67, that is bearish for markets next week, if UTIL remains above 485.67 at 4 PM EST today, that is a feather in the bulls cap for next week.

Since the bulls have taken back the utes, the algo is now more focused on copper and volatility. At the same time, semiconductors, SOX, is the only sector that is contributing negatively to markets. Thus, focusing on these three characters, the bulls will be happy if the SOX moves above 386. This would pave the way to SPX 1500.  The weakness in chip earnings, as well as the GOOG debacle yesterday, however, will actually serve to hold the SOX down.  The bears need to move JJC under 46.40, or, the VIX above 16.40, to ignite bearish negativity in the markets. If JJC stays above 46.40, and VIX below 16.40, and SOX below 386, that is status quo, and the broad indexes will continue stumbling sideways. Note the serious copper weakness today, currently down about 1.3%, which would place JJC down around 46.70 at the open, above the critical 46.40, but nearing this danger line. If JJC drops under 46.40 and the SPX drops under, say, 1452.50, Keybot will likely flip to the short side.

For the SPX today starting at 1457, the bulls need seven points higher, to touch the 1464 handle, and this will create an upside acceleration thru the closing high this year at 1465.77 and up to test 1468, perhaps 1472.  The bears need to push the SPX five points lower, to move under 1453, if so, the markets will accelerate lower.  A move thru 1454-1463 is sideways action. Stay alert and cautious. Markets remain highly unstable.

10/21/12; 7:00 PM EST =

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