Thursday, October 9, 2014

STOCK MARKET BEARISH -- SHORT -- CAUTION; Unprecedented Quadruple Whipsaw

Keybot the Quant flips to the short side triggering at SPX 1943 for an unprecedented quadruple flip this week changing sides each consecutive day; flip long Monday, flip short Tuesday, flip long Wednesday, flip short Thursday. The rareness of this price action cannot be understated. In the entire history of the model and through all back testing and development for about 15 years there has never been a quadruple flip move by the algo. Bulls and bears keep fighting for control. The Dow moves over 200 points intraday for three days in a row and triple digits for 14 of the last 18 days; very intense price action.

The algo is back to tracking a financials versus retail stocks battle. Watch XLF 23.11 and RTH 62.15. XLF is 22.89 causing bearishness. RTH is 62.69 causing bullishness. So bulls need XLF above 23.11 to stop the selling and create another upside rally move. Bears need RTH under 62.15 to accelerate the selling and create market carnage. If status quo exists (XLF under 23.11 and RTH above 62.15), equities stagger along sideways. The bears are driving the bus again. The stock market has become a circus.

For the last one-day trade, the algorithm program and the actual trading each lose -1%. Keybot exited SPY and entered DOG for the current trade.

10/12/14; 7:00 PM EST =
10/9/14; 11:54 AM EST = -23; signal line is -11; go short 1943; (Benchmark SPX for 2014 = +5.1%)(Keybot this trade = -1.0%; Keybot for 2014 = +6.7%)(Actual this trade = -0.9%; Actual for 2014 = +7.4%)
10/9/14; 10:35 AM EST = -23; signal line is -11 but algorithm remains long
10/9/14; 9:36 AM EST = -7; signal line is -11
10/8/14; 3:49 PM EST = +7; signal line is -10
10/8/14; 3:22 PM EST = -7; signal line is -10; go long 1962; (Benchmark SPX for 2014 = +6.2%)(Keybot this trade = -0.6%; Keybot for 2014 = +7.7%)(Actual this trade = -0.6%; Actual for 2014 = +8.3%)

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