STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side to begin the new week of trading. Italy's referendum and Austria's election may sends stocks wildly one way or the other on Monday so flip a coin. The bears are in charge of the stock market currently with the algo number 6 points under the signal line.

Monday's stock market direction is dictated by a battle between retail stocks and volatility. Market bulls win and a rally will be in play if VIX drops under 13.85 (now at 14.12). Market bears win if RTH drops under 77.17 (now at 77.79). In addition to weaker retail stocks, if the semiconductors weaken, especially with SOX dropping under 835 and lower, the broad stock market will be dropping like a stone.

For the SPX starting the week at 2192, the bulls need to touch the 2198 handle and bingo, price will be above 2000 in a heartbeat heading higher. The bears need the SPX to drop under 2188 to accelerate the downside. A move through 2189-2197 is sideways action to begin the week.

Bulls win with lower volatility. Bears win with lower retail and chip stocks. Keybot prints one pre-scheduled number this week on Friday morning. The caution flag is out since volatility may go either way tomorrow. If VIX drops under 13.85, consider the imminent turn to be in play, and if the SPX moves above 2198, Keybot will likely flip long.

12/11/16; 7:00 PM EST =

12/9/16; 10:00 AM EST =

12/4/16; 7:00 PM EST = +52; signal line is +58

12/2/16; 1:10 PM EST = +52; signal line is +58

12/2/16; 12:52 PM EST = +66; signal line is +58 but algorithm remains short

12/2/16; 12:42 PM EST = +52; signal line is +58

12/2/16; 10:45 AM EST = +66; signal line is +59 but algorithm remains short

12/2/16; 9:00 AM EST = +52; signal line is +58

12/1/16; 3:59 PM EST = +52; signal line is +58

12/1/16; 3:15 PM EST = +36; signal line is +58

12/1/16; 12:58 PM EST = +52; signal line is +58; go short 2193; (Benchmark SPX for 2016 = +7.3%)(Keybot algo this trade = +3.6%; Keybot algo for 2016 = +15.3%)(Actual results this trade = +22.3%; Actual results for 2016 = +39.3%)