Thursday, March 27, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains bearish as the roller coaster ride continues. The algo prints four numbers yesterday. The gap-up scenario occurred so the algorithm was prohibited from flipping sides for 87 minutes. At about 11 AM as the timer expired, the bulls only needed to push the SPX above 1872 to claim victory. Price went up through 1872 for only one minute's time and then tumbled to the downside the rest of the day. The bulls did not have the upside oomph. RTH then failed 59.60 ushering in market negativity. Volatility jumped higher creating additional bearishness.

Watch RTH 59.60 and VIX 14.39 as bull-bear lines in the sand. Both are causing market bearishness now with the RTH at 59.13 and VIX at 14.93. Bears need a stronger retail sector and/or lower volatility or they got nothing. For the SPX starting at 1853, having closed at the low print yesterday, the bulls need a strong 23-handle upside rally move to regain their mojo, a formidable task, but not impossible in these wild, erratic and unstable markets. Since this is a difficult task, the imminent turn status is removed but will immediately return if the RTH or VIX turn bullish.

The bears need to push the SPX any amount lower, any tiny smidge, and this will create several more handles of downside. S&P futures are +3 at this writing about three hours before the US opening bell so the bulls are trying to prevent further downside damage. A move through SPX 1854-1875 is sideways action today. The bears continue to drive the bus but the bulls are tenacious and do not want the long 5-year rally party to end.

3/30/14; 7:00 PM EST =
3/28/14; 10:00 AM EST =
3/26/14; 3:16 PM EST = +33; signal line is +50
3/26/14; 3:02 PM EST = +47; signal line is +51
3/26/14; 1:38 PM EST = +33; signal line is +51
3/26/14; 12:31 PM EST = +47; signal line is +52
3/25/14; 3:45 PM EST = +63; signal line is +52 but algorithm remains short

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