Friday, February 21, 2014

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

Keybot the Quant is on the short side moving into the final Friday session for the week. XLF teased the 21.42 area in the final minutes yesterday and remains on the bull side at 21.44 by two pennies. Copper, retail and volatility remain in the bear camp causing market negativity. So the following four parameters are currently dictating equity direction; XLF 21.42, JJC 39.92, RTH 58.70 and VIX 14.00. The bears must push XLF under 21.42 to send markets lower. If financials move higher today, equities will move higher into the weekend. The bulls must maintain the elevated XLF while at the same time turning at least 1 of the other 3 parameters to their side. If JJC, RTH or VIX turn bullish, any one of them, equities will resume the upward path.

For the SPX starting at 1840, the bulls only need 3 points, to touch the 1843 handle, the critical resistance for the last few days, and the upside will accelerate to test the all-time highs at 1848-1851 in quick order. The bears need to push under 1825 to accelerate the downside (this would occur if XLF drops under 21.42 and heads lower). A move through 1826-1842 is sideways action. S&P futures are +3 about 4-1/2 hours before the opening bell which sets the table for a test of the 1843 resistance.

Keybot wants to go long right now but other parameters have to latch in place to permit the move. If the SPX moves above 1843, Keybot will likely flip long, however, if there is a gap-up opening, a timer may prevent the move for about 90 minutes. A bull-bear struggle is ongoing with the algo number and signal line within one point of each other. Markets are deciding which way to break. Both bulls and bears have their hands on the steering wheel as the bus careens down the boulevard. Watch SPX 1843 and XLF 21.42 for the answer.

2/23/14; 7:00 PM EST =
2/20/14; 12:29 PM EST = +32; signal line is +31 but algorithm remains short
2/20/14; 11:22 AM EST = +16; signal line is +30

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