Tuesday, March 19, 2013


Keybot the Quant is bearish overnight into the Wednesday session tomorrow. The broad indexes are a circus this afternoon with the Cyprus debacle pulling markets to and fro. Keybot is short but the algo already wants to whipsaw back to the long side. There are internal programming routines that have to click into place before any move back to the bull side would be triggered.  Volatility remains the key. VIX 14.95 is the bull-bear line in the sand. Bulls need to keep VIX under 14.95 and bears need to push the VIX above 14.95. The SPX moved through a 20-handle range today. With volatility rising, the intraday, and day to day, point moves will become more wide and wild. SOX 421 is also important moving forward.

For the SPX, starting Wednesday at 1548, the bulls need to push above 1557 to create an upside acceleration. The bears need to push under 1539 to accelerate the downside. A move through 1540-1556 is sideways action. As a general rule of thumb, if the SPX moves above 1557 tomorrow, with the VIX remaining under 14.95, Keybot will likely whipsaw back to the long side. Markets are extremely unstable and erratic.

3/24/13; 7:00 PM EST =
3/19/13; 2:06 PM EST = +49; signal line is +39 but algorithm says stay short
3/19/13; 1:23 PM EST = +33; signal line is +39; go short 1540; (Benchmark SPX for 2013  = +8.0%)(Keybot this trade = +1.3%; Keybot for 2013 = +2.3%)(Actual this trade = +2.1%; Actual for 2013 = +1.8%)

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