Saturday, March 19, 2016


Keybot the Quant remains long through the weekend in a wild finish to the trading week. The stock market pivoted higher on Thursday destroying the bear's hopes for downside. The SPX is above 2031 and the GTX is above 2152, two key levels identified by the robot, and the big time push higher in equities occurs as NYA moves above 10202. The NYA 10202 level will be key first thing Monday morning.

The algo is off the charts bullish hitting the +93 level this is astounding. The Keybot algorithm is an oscillator at its heart so algo numbers over +80 represent an overbot condition and under -80 oversold. Overbot conditions typically hint at a euphoric top taking place. Prior overbot levels during the last couple years occurred in May-June 2014 and a major top occurred in late June 2014. The algorithm hit +84 in February 2015 which resulted in a stock market top. In April-May 2015, the algo printed in the +81 to +84 overbot territory and that marked the multi-month top in the stock market that continues to hold 10 months later. What will a +93 lead to? If playing the market on the long side over the next couple months exercise extreme caution since there is likely an important and significant stock market top on the come at any time say within the next 8 weeks. Interestingly, as a sidebar, the stock market topped in October 2007 then the crash began about one year later in October 2008. Using this same fractal relationship, the stock market placed its top last May 2015 and one year later would be May 2016. Perhaps traders will be screaming "May Day; May Day" in a few weeks time.

For now, the bulls are joyously celebrating each day with the algo number 27 points above the signal line. Stocks will continue higher unless the bears can send the NYA under 10202 which will stop the rally in its tracks. Monday can be set up after the Sunday pre-scheduled number prints tomorrow.

3/20/16; 7:00 PM EST =
3/18/16; 1:48 PM EST = +92; signal line is +65
3/18/16; 1:40 PM EST = +78; signal line is +64
3/18/16; 10:00 AM EST = +92; signal line is +63
3/18/16; 9:36 AM EST = +93; signal line is +62
3/17/16; 3:51 PM EST = +79; signal line is +61
3/17/16; 3:27 PM EST = +93; signal line is +60
3/17/16; 3:17 PM EST = +79; signal line is +58
3/17/16; 2:13 PM EST = +93; signal line is +57
3/17/16; 10:55 AM EST = +79; signal line is +55
3/16/16; 3:51 PM EST = +65; signal line is +54

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