Thursday, January 14, 2016


Keybot the Quant remains short but the model remains positioned to go long. The internal parameters will not fully latch as yet to permit the move. Keybot has not printed any numbers since Tuesday. At yesterday's opening bell, price gapped higher to 1946-1950 and then collapsed trending lower all day long. The algo did not bite on the long side.

Did you see late in the day yesterday UTIL dropping down to the exact range of 577.25-577.85 called out by the algo and then bounce? Isn't it amazing that those levels are called out before they occur? That was critical. If UTIL fails at 577, stocks will likely crash. So anyone bullish on the markets should be happy with the magnitude of the selloff that occurred yesterday since markets were actually on the edge of a complete breakdown into free fall.

UTIL 577.25-577.85 remains key. Price is above at 584 so this is causing lift in the stock market. Watch VIX 19.40. Price is 22.29 firmly above causing market bearishness. If VIX falls under 20, the recovery rally in stocks is real, until then, markets remain a coin-flip.

Keybot will likely flip long if the SPX moves above 1950 or if some wild upside orgy move kicks in it could flip long sooner. This is a formidable task so bulls may simply try to stabilize markets today and stop the market selling by keeping utes elevated and pushing volatility lower. The beat goes on. Keybot the Quant wants to flip long but the ducks are not yet lined up in a row. SPX is at 1917.

It is interesting looking back to the last day of trading for 2015 on New Year's Eve. Keybot flipped short during the last minute of trading of 2015 and has been short ever since. The move to end the year appeared very odd and unexpected at the time but here we are two weeks later. Machines are smarter than humans.

1/17/16; 7:00 PM EST =
1/15/16; 10:00 AM EST =
1/12/16; 3:26 PM EST = -24; signal line is -36 but algorithm remains short

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