Thursday, January 30, 2014

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long moving into the Friday session. The algo is tracking commodities and financials. The market bulls need XLF 21.44; now at 21.31 creating bearishness. The bears need GTX 4780; now at 4784 creating bullishness. One of these two should flinch and markets will move in that respective direction. If the status quo remains, with XLF under 21.44, and GTX above 4780, then equities will stagger sideways into the weekend.

Utilities are worth watching although they will likely not have any impact on market direction on Friday. UTIL is not a factor now since it jumped higher to 502, however, for next week the two key levels are 506.57 and 495.00. The bulls pumped the utes today to try and develop some momo to move UTIL above 505-507 before tomorrow's bell. The bulls must finish the day above UTIL 506.57 at 4 PM EST, otherwise, the market bears will receive an advantage come Monday morning. UTIL 506.57 will also indicate how strong, or not, the market rally is so watch it closely Friday afternoon (above 506.57 indicates that the rally is strong and will continue into next week; below 506.57 indicates the market rally will peter out and stall).

For the SPX starting at 1794, the bulls need to touch the 1799 handle and a big upside party will result with price moving towards 1806 and potentially 1808-1810. The bears need to push under 1777, a formidable task but not impossible, to regain their mojo. Instead, bears will focus on weakening utilities and moving GTX under 4780. A move through 1778-1798 is sideways action into the weekend. If the GTX falls under 4780, and the SPX drops under 1777, Keybot will likely flip to the short side. If XLF moves above 21.44, equities will rally far higher. Keybot prints a pre-scheduled number tomorrow morning. The caution flag remains out.

2/2/14; 7:00 PM EST EOM =
1/31/14; 10:00 AM EST =
1/30/14; 11:23 AM EST = +16; signal line is +10; go long 1791; (Benchmark SPX for 2014 = -3.1%)(Keybot this trade = +2.0%; Keybot for 2014 = +1.3%)(Actual this trade = +3.7%; Actual for 2014 = +2.0%)

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