Wednesday, August 19, 2015


Keybot the Quant remains long and for all the market dramatics today the algo only prints two numbers and motors along on the long side. The bears were in the driver's seat at 11 AM EST but did not have the oomph to force markets lower. XLF 25.00 is key and will dictate market direction tomorrow. XLF begins at 25.05 on the bull side so the broad stock market will float higher. If XLF drops under 25, the selling in equities will accelerate.

Bulls will confirm an upside rally ahead if the VIX drops under 13.50 (now at 15.25 in the bear camp causing market negativity). If VIX stays above 13.50 and XLF above 25, stocks will float along sideways with a slight upward bias. If XLF drops under 25, stocks will start selling off and Keybot the Quant will likely go short but the SPX probably will need to drop under 2071. If the VIX drops under 13.50, bulls will be partying into the weekend with a big rally.

For the SPX starting at 2080 on Thursday morning, the bulls need to touch the 2096 handle to accelerate higher above 2100 in quick order. The bears need to push SPX under 2071 to accelerate the downside and bad things will begin happening to equities. The SPX started the year at 2059. A move through 2072-2095 on Thursday is sideways action. The imminent turn notation is in the title line since XLF under 25 will set the algo up to potentially flip short. Therefore, listen for any bank news overnight that will influence XLF one way or the other.

8/23/15; 7:00 PM EST =
8/19/15; 11:06 AM EST = +20; signal line is +18
8/19/15; 10:46 AM EST = +4; signal line is +18 but algorithm remains long
8/18/15; 11:37 AM EST = +20; signal line is +18

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