Tuesday, January 14, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short after the snap-back Tuesday action occurs. It is always a formidable task for markets to retrace large moves, up or down, and today equities retrace the large Monday down day. The algo did not print any numbers today. Note, however, that retail and utes remain bearish, and copper and volatility bullish. No change. The expectation would be flat markets. The same parameters are key, in order of importance; RTH 60.04, UTIL 494.12, JJC 40.40 and VIX 13.87. RTH and UTIL are causing negativity and JJC and VIX are causing positivity. Whichever parameter flips sides will dictate the direction of the broad indexes. RTH starts at 59.98 only 6 pennies from the bull-bear line sitting on the bear side. If RTH moves above 60.04, and the SPX moves above 1839, and both remain above, Keybot will likely flip to the long side.

For the SPX starting at 1839, closing near the highs, the bulls only need to see a smidge of green in the S&P futures overnight and the bulls will be expanding the upside rally with the SPX on the way to test the all-time highs at 1848-1850. The bears need to push under 1821 to accelerate the downside, a formidable task but not at all impossible. A move through 1822-1839 is sideways action. Markets remain very unstable and erratic; the action the last two days obviously illustrates the point. RTH 60.04 is very important and also keep an eye on copper. Interestingly, next week the UTIL important lower limit bull-bear line in the sand will be 491.68 far above the 480.00 number for this week (this is a very attractive set up for bears). The bulls will need to start building insurance in utilities for next week so look for strength to end this week. If utes remain flat to weaker moving into the weekend, that will be a sign of trouble ahead for markets next week, a holiday-shortened week. The imminent turn status is in play since bullish RTH and SPX action will likely flip the algo back to the long side.

1/17/14; 9:00 AM EST =
1/13/14; 2:28 PM EST = +33; signal line is +44; go short 1827; (Benchmark SPX for 2014 = -1.1%)(Keybot this trade = -0.5%; Keybot for 2014 = -0.7%)(Actual this trade = -1.1%; Actual for 2014 = -1.7%)

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