Tuesday, February 5, 2013


Keybot the Quant remains long and did not print any numbers during the Monday session. The algo identifies utilities as the main sector influencing broad market direction. Yesterday, the bears prevented the UTIL 475.49 from occurring which weakened markets. However, the bears could not push under UTIL 467.65 so this stalls the market downside. Very simply, bulls win and markets go up if UTIL moves above 475.49. The bears win and markets move lower if UTIL drops under 467.65.  UTIL is at 471.36, smack-dab in the middle of the two parameters, thus, equilibrium. Basically, whichever way the utes move, the markets will move.  The quant is also showing increased interest in volatility. VIX is 14.67 and the 15.90-16.00 area is setting up as the bull-bear line in the sand. If UTIL drops under 467.65 and VIX moves above 16, Keybot will likely flip short. The futures show that an up move is on tap for the SPX this morning.

For the SPX starting at the strong 1496 support, the bulls need to retrace yesterday's move to 1513 to regain their momo, formidable, but not impossible. Look at how yesterday's down move retraced Friday's up move, and then some. The bears only need one single point lower, to push under 1495 and the downside will accelerate to a test of 1489 quickly. The 1485 level is very strong support. A move though 1497-1512 is sideways action today. Markets are erratic and unstable. The caution flag is not displayed in the title but the markets appear shaky. UTIL 475.49 and 467.65 will tell a lot today.

2/10/13; 7:00 PM EST =
2/3/13; 7:00 PM EST = +63; signal line is +44
2/1/13; 10:00 AM EST = +63; signal line is +44

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