Sunday, May 5, 2013

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long moving into the new week of trading. Volatility remains key. Markets will climb higher if the VIX stays under 14. Markets will noticeably sell off if the VIX moves above 14. The bulls appear in firm control and will try to further bounce copper and commodities to gain additional strength. The bears will try to create weakness in semiconductors (that are very strong and created much of the upside oomph last week in addition to the lower volatility), financials and retail sectors. Even with higher volatility that will create weaker markets, it does not appear that it would be enough for Keybot to flip short. The best hope for bears would be to see the VIX move over 14 and then oscillate on each side of 14 for a few times which would ratchet the signal line higher so the algo could trigger short, otherwise, the bulls keep running higher.

For the SPX starting at 1614, a new all-time closing high, bulls need to push up through 1618 to create a several handle acceleration to new heights. The bears need to retrace Friday's up move and push under the strong 1597-1598 support, a formidable challenge but not impossible, to accelerate the downside to 1593 in quick order. A move through 1599-1617 is sideways action. Keybot does not print any pre-scheduled numbers this week so the algo will solely print based on the market action.

5/12/13; 7:00 PM EST =
5/5/13; 7:00 PM EST = +46; signal line is +31
5/3/13; 9:00 AM EST = +46; signal line is +31

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