Sunday, March 16, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short moving into the new week of trading. Elevated volatility is causing market negativity. Elevated financials, commodities and retail are keeping the bulls in business and preventing any further drop in equities. Therefore, the bulls need VIX under 14.15 to signal the all-clear and restart the market upside. The bears need either XLF under 21.65, GTX under 4856 and/or RTH under 59.40. Any 1 of the 3 will increase market selling pressure and lock in more sustainable downside action going forward.

For the SPX starting at 1841, the bulls need to push above 1852 and price will accelerate higher to 1859. The bears need to drop down through 1840, only one point lower, and the downside will accelerate and begin targeting 1828. Thus, any negativity in the overnight S&P futures will provide a green light for bears. Bulls need to keep the overnight futures positive with all their might. A move through 1841-1851 is sideways action for Monday.

If the VIX moves under 14.15 and the SPX above 1852, and both remain bullish, Keybot will likely flip long, hence, the caution flag remains out. If either XLF, GTX or RTH turn bearish, the caution flag will be removed since the bears will be pushing equities much lower. Keybot prints one pre-scheduled number this week on Tuesday morning. The algo only printed one number last week, a pre-scheduled number, so the algo actually has not generated a number based on the program's variables and parameters in over one week's time which is very odd behavior. Markets may be at a key inflection point. The parameters above will tell you the winner. The broad indexes remain erratic and unstable. The higher volatility will now create larger and larger intraday and day to day point swings.

3/23/14; 7:00 PM EST =
3/18/14; 9:00 AM EST =
3/16/14; 7:00 PM EST = +48; signal line is +51
3/14/14; 10:00 AM EST = +48; signal line is +51

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