STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long through the weekend moving into the new week of trading. The bulls are riding the bears slapping them around left and right. Keybot is in idle mode only printing the pre-scheduled numbers in the back half of last week. The algo continues to surprise by ticking up one more tick to +81 with the algo number. The loftiness and overbot nature of this number cannot be understated. The algo is at levels that are rarely seen only once or twice per year at most. Thus, a multi-month top may be in the offing, however, Keybot only sees 1's and 0's and for now the band plays on as the Fed easy money continues flowing like water pumping the stock market higher.

Looking at the algorithm internals, the retail sector appears to be the best chance for bears to reverse the market upside. Volatility would wreak havoc on markets if the VIX popped higher a couple bucks, over VIX 13.47, but the main parameter to watch is RTH 59.04. The RTH begins at 59.47 forty-three cents on the bull side creating higher equity markets. The bears need to push RTH under 59.04 or they got nothing. Under 59.04 and you will know that extended downside market selling is on tap. So listen for any news concerning retailers since each news snippet will send RTH up or down.

Of particular interest is the West Coast port slowdown where the unions and shipping companies must agree on a contract by Monday evening. Obviously, with back-to-school supplies already en route to stores, and holiday shipments following close behind, the strike, or resolution, will be key in determining retail, and subsequently, overall equity market direction. During the Monday session it will likely become apparent if the two sides will kiss and make up, or perhaps extend the deadline and keep talking, or storm out of the room calling each others' momma's bad names. RTH will respond.

For the SPX starting at 1961, the bulls need to push up through 1961.50 less than one point higher, and bingo, the upside orgy continues with a several handle acceleration occurring which tests the all-time highs in the upper 1960's. Therefore, watch the overnight S&P futures since any positivity will result in the bullish path described and bulls will be popping the champagne corks for breakfast.

The bears need to push the SPX under 1952, about nine points lower, to regain their mojo which will immediately drop price lower to test the strong 1949 support for a bounce or die decision. A move through 1953-1961 is sideways action for Monday. Keybot prints two pre-scheduled numbers this week; one on Monday evening after the closing bell due to the EOM, EOQ2 and EOH1, and the other on Thursday morning before the opening. The trading week is a four-day holiday shortened week with the markets closed on Friday for the Independence Day July 4th holiday.

7/6/14; 7:00 PM EST =

7/3/14; 9:00 AM EST =

6/30/14; 7:00 PM EST EOM =

6/29/14; 7:00 PM EST = +81; signal line is +63

6/27/14; 10:00 AM EST = +81; signal line is +62

6/24/14; 10:00 AM EST = +80; signal line is +62