Saturday, January 2, 2016


Keybot the Quant begins the new year on the short side. The failure in financials late Thursday, the last trading day of 2015, created the late-day flush lower in stocks. Therefore, the banks hold the key to begin 2016. Watch XLF 23.85 an uber important bull-bear line in the sand. Price is at 23.83 favoring bears by a couple of pennies but the banks can pivot either way on Monday morning. As the banks go, so go the markets. Obviously, the bears need XLF to remain under 23.85 and drop further which creates smooth sailing for a lower stock market. The bulls need to push XLF above 23.85 and the stock market selling will immediately stop and a rally begins.

The UTIL 580.50 and 572.36 levels are very important. Price is at 578 creating bearishness in the markets because it is under 580.50 but also creating bullishness since it is above 572. Utes require close watching. Bulls need UTIL above 580.50 to gain strength. Bears need UTIL under 572 to gain strength. The UTIL 572.36 level is in play all of this week; ditto the 580.50. If UTIL 572-573 fails, a trap-door effect may occur for the stock market where the SPX drops from 15 to 30 handles in a heartbeat.

The SOX 662.30 level is key; price is at 663.48 only one point in the bull camp. If SOX drops under 662.30, the stock market will take a very strong leg lower. Market bulls are okay if they keep SOX above 662.30. Watch SPX 2053 which remains an uber important level. SPX begins 2016 at 2044 nine points under this key level. If the SPX moves above 2053, bulls are back on easy street.

For the SPX starting at 2044 on Monday morning, the first trading day of the year, the bears only need a smidge of negativity in the S&P futures overnight Sunday into Monday and that will set up an acceleration lower for the SPX into the 2030's. The bulls need to push the SPX above 2063 to regain their mojo, a formidable task, so instead bulls will focus on pushing banks and chips higher. A move through 2045-2062 is sideways action to begin the week.

In a nutshell, the bears need to keep XLF under 23.85 and then cause SOX to fail under 662. This will create downside carnage in the stock market. The bulls need to immediately push XLF above 23.85 to signal the all clear and a halt to the market selling. Keybot prints one pre-scheduled number this week on Friday morning.

1/10/16; 7:00 PM EST =
1/8/16; 9:00 AM EST =
1/1/16; Begin 2016 Data Set = +6; signal line is +27; go short 2044; (Benchmark SPX for 2016  = 0%)(Keybot algo this trade = 0%; Keybot algo for 2016 = 0%)(Actual results this trade = 0%; Actual results for 2016 = 0%)

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.