STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side but the stock market remains sideways choppy. Banks are key. The algo is tracking XLF 19.47 now at 19.55 creating market positivity. Stocks will take a strong leg lower if 19.47 fails. Yesterday, during the afternoon selloff, XLF came down and kissed the sub-19.47 level but immediately recovered so the bulls are not going down without a fight and they held the line at the first test of this support.

A critical failure occurs with the NYA losing the 40-week MA at 10378. NYA is at 10334 creating market negativity. Bulls need to push NYA above 10378  or they are toast. The NYA 40-week MA failure is serious since it ushers in a cyclical bear market for stocks.

For bulls to recover and send stocks higher, they must keep XLF above 19.47 and heading higher. At the same time they need to boost commodities, GTX, above 2273 and NYA above 10378 to prove they have the beans to take stocks higher. The bears need the XLF 19.47 failure and stocks will drop like a stone. Status quo maintains a choppy sideways path for stocks.

Keybot flipped short on Tuesday at SPX 2123. The last trade lost -1% with the algorithm program and -2% with the actual trading.  The algo has generated +18% in returns this year thus far. The algo exited SSO and entered SDS for the short side. The banks, XLF 19.47, and NYA Index, NYA 10378, tell the market directional tale; watch them like a hawk. 

11/6/16; 7:00 PM EST =

11/4/16; 9:00 AM EST =

11/2/16; 10:36 AM EST = +19; signal line is +43

11/1/16; 2:32 PM EST = +33; signal line is +43

11/1/16; 2:20 PM EST = +19; signal line is +43

11/1/16; 10:14 AM EST = +33; signal line is +43; go short 2123; (Benchmark SPX for 2016 = +3.9%)(Keybot algo this trade = -1.0%; Keybot algo for 2016 = +11.4%)(Actual results this trade = -2.0%; Actual results for 2016 = +18.0%)

10/31/16; 7:00 PM EST EOM = +33; signal line is +43 but algorithm remains long

10/31/16; 10:34 AM EST = +33; signal line is +43 but algorithm remains long

10/30/16; 7:00 PM EST = +47; signal line is +43

10/28/16; 10:00 AM EST = +47; signal line is +42

10/27/16; 10:09 AM EST = +48; signal line is +42

10/27/16; 9:36 AM EST = +62; signal line is +41

10/26/16; 3:59 PM EST = +46; signal line is +39

10/26/16; 3:57 PM EST = +32; signal line is +38 but algorithm remains long

10/26/16; 3:26 PM EST = +46; signal line is +38

10/26/16; 3:06 PM EST = +32; signal line is +38 but algorithm remains long

10/26/16; 1:11 PM EST = +48; signal line is +38

10/26/16; 12:06 PM EST = +62; signal line is +38

10/26/16; 11:37 AM EST = +46; signal line is +37

10/26/16; 11:12 AM EST = +62; signal line is +37

10/26/16; 10:36 AM EST = +46; signal line is +37

10/26/16; 10:24 AM EST = +32; signal line is +38 but algorithm remains long

10/26/16; 9:59 AM EST = +46; signal line is +38

10/26/16; 9:47 AM EST = +62; signal line is +39

10/25/16; 10:00 AM EST = +46; signal line is +39

10/23/16; 7:00 PM EST = +47; signal line is +39

10/20/16; 12:02 PM EST = +47; signal line is +39

10/20/16; 10:41 AM EST = +33; signal line is +39 but algorithm remains long

10/19/16; 10:44 AM EST = +47; signal line is +40; go long 2144; (Benchmark SPX for 2016 = +4.9%)(Keybot algo this trade = +0.5%; Keybot algo for 2016 = +12.4%)(Actual results this trade = +0.8%; Actual results for 2016 = +20.0%)