Friday, January 18, 2013


Keybot the Quant remains long with one trading session remaining ahead of the three-day holiday weekend. The bulls came to play yesterday and slapped all bear hopes to the ground.  Oil, commodities and copper provided the thrust, and traders correctly front-ran China data since the GDP numbers beat as expected.  For the bulls to continue the party to SPX 1500+, the last hurdle to leap over is the utilities sector. Utes are key and typically they falter ahead of a large market drop. UTIL has been weak for months but the broad markets have hung on.  UTIL 466.37 is key. This parameter you can follow since it is the 50-week MA. If UTIL moves above 466.37, the SPX is headed over 1500.  If the bears prevent UTIL 466.37 and keep it in the bear camp, a lid will be placed on the up move in the broad indexes. The bears need to push either GTX under 4935, or JJC under 45.68, otherwise, they got nothing.

For the SPX today starting at 1481, the bulls need to punch thru 1485 and it will be a party to the 1490's in quick order.  The bears need to stop the upside momo by retracing yesterday's move and sending the SPX under 1473, if so, that will further accelerate the downside. A move thru 1474-1484 is sideways action.  Despite the bullishness yesterday, remain cautious moving forward. A quick reversal in commodities, say due to a stronger dollar and weaker euro, and a few handle drop in the SPX, would be all that is required to send Keybot towards testing the bear side again. A pre-scheduled number prints at 10 AM today so the action can be updated mid-morning. The bulls are driving the bus.

1/20/13; 7:00 PM EST =
1/18/13; 10:00 AM EST =
1/17/13; 9:30 AM EST = +47; signal line is +26
1/17/13; 9:00 AM EST = +17; signal line is +23 but algorithm says stay long

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