STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side this morning at SPX 1930; just when it seemed that the model was committed long. The  bears came to play today turning the three parameters previously described to the bear camp and the algo wasted no time turning short. In these erratic markets, however, keep an eye out for a whipsaw back to the long side. Keybot flipped short but already wants to go long again at noon time. If the SPX moves above 1942, Keybot will likely flip long.

The bears need to push RTH (retail stocks) under 72.58 and/or JJC (copper) under 23.81 to verify that down is the direction for stocks. The bulls need to push SOX (chips) above 610 to prove that higher is the direction for the stock market. If RTH and JJC remain bullish, and SOX remains bearish, stocks will likely stagger along sideways.

For the SPX starting at 1921, the bulls need to push above 1942 to accelerate higher, a formidable task. The bears need to push under 1919, only 2 points lower, and the downside will accelerate lower to 1912 in quick order. A move through 1920-1941 is sideways action. The bears are driving the bus stealing it away from the bulls, however, Keybot wants to flip long right now; keep an eye on 1942 as well as retail, copper and chips which will dictate market direction.

On the last trade, the algorithm gains +1.5% and the actual trading gains +3%. The benchmark SPX remains negative on the year down -5.6%. Keybot exits SSO and enters SDS. Listen closely for any news concerning retail stocks overnight which will greatly impact market direction.

2/28/16; 7:00 PM EST =

2/26/16; 10:00 AM EST =

2/23/16; 12:01 PM EST = +5; signal line is +1 but algorithm remains short

2/23/16; 10:20 AM EST = -11; signal line is +0; go short 1930; (Benchmark SPX for 2016  = -5.6%)(Keybot algo this trade = +1.5%; Keybot algo for 2016 = +8.5%)(Actual results this trade = +3.1%; Actual results for 2016 = +14.5%)

2/23/16; 10:00 AM EST = +21; signal line is -0

2/23/16; 9:36 AM EST = +24; signal line is -2

2/22/16; 3:43 PM EST = +38; signal line is -4

2/22/16; 3:34 PM EST = +22; signal line is -6

2/22/16; 3:24 PM EST = +38; signal line is -9

2/22/16; 2:43 PM EST = +24; signal line is -10

2/22/16; 1:07 PM EST = +38; signal line is -11

2/22/16; 11:36 AM EST = +22; signal line is -14

2/22/16; 11:32 AM EST = +38; signal line is -17

2/22/16; 11:19 AM EST = +24; signal line is -20

2/22/16; 9:36 AM EST = +8; signal line is -23

2/21/16; 7:00 PM EST = -8; signal line is -24

2/18/16; 11:34 AM EST = -8; signal line is -26

2/18/16; 10:52 AM EST = -24; signal line is -27

2/17/16; 1:44 PM EST = -8; signal line is -27

2/17/16; 10:44 AM EST = -24; signal line is -28

2/17/16; 10:35 AM EST = -8; signal line is -28

2/17/16; 10:13 AM EST = -24; signal line is -39

2/17/16; 9:36 AM EST = -8; signal line is -30

2/17/16; 9:00 AM EST = -24; signal line is -31

2/14/16; 7:00 PM EST = -24; signal line is -31

2/12/16; 10:00 AM EST = -24; signal line is -32

2/9/16; 9:36 AM EST = -23; signal line is -32

2/7/16; 7:00 PM EST = -7; signal line is -32

2/5/16; 9:00 AM EST = -7; signal line is -33

2/3/16; 9:36 AM EST = -7; signal line is -35

1/31/16; 7:00 PM EST EOM = -23; signal line is -36

1/29/16; 10:00 AM EST = -23; signal line is -37

1/29/16; 9:34 AM EST = +23; signal line is -38; go long 1902; (Benchmark SPX for 2016  = -7.0%)(Keybot algo this trade = +7.0%; Keybot algo for 2016 = +7.0%)(Actual results this trade = +11.4%; Actual results for 2016 = +11.4%)