STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains on the long side all this week but is champing at the bit to go short with the algo number 6 points below the signal line. The internal parameters are not completely latching as yet to permit the move. As a general guideline, if the SPX drops under 2125 today, Keybot will likely flip short.

It has been a crazy week with Donald Trump elected as the next POTUS. Markets are going through a violent repricing. The UTIL 650 level, a trap-door for the stock market, opened yesterday and this requires close watching. Market bulls are fine and the rally can be sustained if UTIL moves above 650 and stays above 650. If UTIL remains below 650 (now at 647), the stock market will trend lower for the weeks and months ahead.

Watch VIX 13.93 which is a bull-bear line in the sand. If VIX drops below 13.93 (now at 14.03), the stock market rally is real and equities will continue a joyous path higher. If the VIX does not move below 13.93, the stock market will likely roll over to the downside.

Thus, the market bears need to push the SPX under 2125 which will likely flip the algorithm short. The market bulls need to push UTIL above 650 and/or VIX under 13.93 to create further upside joy. If UTIL remains below 650, and VIX above 13.93, stocks will begin rolling over to the downside. The beat goes on.

On the previous short trade, the direction was correct with the computer program gaining a smidge +0.3% but the actual trading lost -1%. The 2x ETF's are known for quirky behavior and sometimes you do not end up with a gain even when the direction is correct. Keybot exited SDS and entered IWM. The algo is up +17% on the year with 7 trading weeks remaining in 2016.

When Trump started rising in the election results Tuesday evening, the S&P futures were down over 100 handles which would have been an ugly loss for Keybot, however, after Trump won the electoral college count at about 1 AM EST yesterday and became president-elect, and gave a gracious acceptance speech, futures rallied and never looked back. By the time the regular session opened yesterday the SPX was flat, and then rallied as the day played out.

Bears win with SPX under 2125. Bulls win with UTIL above 650 or VIX below 13.93 and receive double rally fuel if both turn bullish. If status quo remains, stocks move choppy sideways with a slight upward bias.

11/13/16; 7:00 PM EST =

11/11/16; 10:00 AM EST =

11/9/16; 1:26 PM EST = +17; signal line is +23 but algorithm remains long

11/9/16; 12:37 PM EST = +33; signal line is +24

11/9/16; 12:21 PM EST = +17; signal line is +24 but algorithm remains long

11/9/16; 11:51 AM EST = +33; signal line is +25

11/9/16; 9:41 AM EST = +17; signal line is +25 but algorithm remains long

11/7/16; 9:36 AM EST = +33; signal line is +27; go long 2116; (Benchmark SPX for 2016 = +3.5%)(Keybot algo this trade = +0.3%; Keybot algo for 2016 = +11.7%)(Actual results this trade = -1.0%; Actual results for 2016 = +17.0%)

11/6/16; 7:00 PM EST = +3; signal line is +27

11/4/16; 3:30 PM EST = +3; signal line is +30

11/4/16; 3:21 PM EST = +19; signal line is +31

11/4/16; 3:09 PM EST = +3; signal line is +32

11/4/16; 12:02 PM EST = +19; signal line is +33

11/4/16; 11:46 AM EST = +19; signal line is +35

11/4/16; 11:17 AM EST = +19; signal line is +36

11/4/16; 10:22 AM EST = +3; signal line is +37

11/4/16; 10:00 AM EST = -13; signal line is +39

11/4/16; 9:36 AM EST = +3; signal line is +40

11/4/16; 9:00 AM EST = +19; signal line is +42

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%)