Thursday, April 4, 2013

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is short going into the Thursday session. The breakdown in semiconductors is key to the market weakness so watch SOX 425 closely (now at 416). Market bears will maintain control on the broad indexes as long as SOX stays under 425. Commodities and copper have broken down as well creating market negativity. On the bull side, VIX remains under 14.50 (now at 14.21) and allows the bulls to continue along without worry. The bulls are also keeping financials, XLF, above 17.80 which creates market positivity. Thus, the battle lines are in place. The bulls will try to move SOX back above 425 and the markets will recover and head to new highs once again.  The bears need to push either VIX above 14.50, or XLF under 17.80, and the market selling will continue in force.

For the SPX today, starting at 1554, the bulls need to push above 1571 to signal the all-clear for accelerated upside. This is 17 points higher and would retrace yesterday's move, a formidable task, but not impossible. The bulls are already trying to paint the day rosy with S&P futures up about 8 four hours before the U.S. open.  The bears need to drop under 1550, four points lower, to accelerate the downside. A move through 1551-1570 is sideways action today. The bears are driving the bus but the markets remain unstable and erratic. The ECB will move markets at 7:45 AM EST (rate decision) and 8:30 AM EST (Draghi press conference).

4/7/13; 7:00 PM EST =
4/5/13; 9:00 AM EST =
4/3/13; 11:02 AM EST = +33; signal line is +45; go short 1562; (Benchmark SPX for 2013  = +8.7%)(Keybot this trade = +0.3%; Keybot for 2013 = +1.5%)(Actual this trade = +0.6%; Actual for 2013 = +1.6%)

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