Tuesday, May 12, 2015


Keybot the Quant flips to the short side this morning after the opening bell at SPX 2096. Utilities, semiconductors and retail stocks create broad market weakness, however, the stock market remains a coin flip with more wild action expected for Wednesday trading. RTH closes at 76.37 it is truly remarkable for the algorithm to highlight these numbers ahead of time before they occur. SOX also came up to the key 699.90 bull-bear level today and failed. XLF dropped near the key 24.35 level and bounced. The VIX also was rejected at the important 15.35 level. It is amazing that a computer program can provide such results predicting key market inflection points before they occur. The thousands of Keybot followers should be more appreciative of the ongoing interesting results and market insight. Stocks remain choppy sideways this year unwilling to yet commit to a sustainable trend either up or down.

Since RTH closes smack-dab at the bull-bear line in the sand at 76.37-76.38, as retail stocks go on Wednesday, so goes the stock market. To add drama and theatrics, Retail Sales data hits at 8:30 AM EST which will likely decide the direction of equities forward. Market bears need weak data to send RTH lower and bulls need strong sales data to send RTH higher. The imminent turn signal remains in the title line because if RTH moves above 76.38, and the SPX moves above 2106, Keybot will likely whipsaw and flip back to the long side.

The benchmark SPX index is up a couple percent on the year thus far. The Keybot algorithm is down one percent and the actual trading is down -2.6% this year. The choppy sideways markets chew up bulls and bears alike. Keybot exited SPY and entered PSQ.

For the SPX starting at 2099 on Wednesday, the bulls need to move above 2105 and bingo, the upside will accelerate several handles and Keybot will likely flip long. The bears must push the SPX under 2086 to regain their mojo 13 points lower. Bears will focus on sending retail stocks lower which would likely keep Keybot short. Wednesday will be an interesting day; watch the retail stocks and the S&P futures reaction after the Retail Sales data since the stock market will likely move in the same direction as RTH.

5/15/15; 10:00 AM EST =
5/12/15; 3:58 PM EST = +33; signal line is +49
5/12/15; 12:35 PM EST = +49; signal line is +50
5/12/15; 10:57 AM EST = +33; signal line is +50
5/12/15; 10:46 AM EST = +49; signal line is +50
5/12/15; 9:30 AM EST = +33; signal line is +50; go short 2096; (Benchmark SPX for 2015 = +1.8%)(Keybot algo this trade = -0.3%; Keybot algo for 2015 = -0.9%)(Actual results this trade = -0.7%; Actual results for 2015 = -2.6%)
5/11/15; 2:02 PM EST = +65; signal line is +50

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