Monday, February 6, 2017


Keybot remains short to begin the new week of trading. Friday was a big up day after the jobs report laid an egg with wage data. The inflation, that the Federal Reserve and other central bankers are trying to create for the last eight years, cannot exist without wage inflation. Therefore, the central banker easy money will continue and equities rally. The central bankers are the market.

Despite Friday's euphoria, the quant did not flip long. The model teased at flipping to the long side but instead remains short. The Keybot the Quant algorithm told you that UTIL 662 would be key at Friday's closing bell and UTIL ended at 662.07. Isn't it amazing the model can call out the key areas that are most influential at determining broad market stock direction at any given time as well as their respective key levels?

For Monday, utilities and retail stocks continue to be the two key areas most impacting the stock market direction currently. Market bears need UTIL  under 662 right away which will help move the stock market lower. Bulls need UTIL to print above 662 in the opening minutes to indicate that stocks will be rallying going forward. Bulls will also benefit if UTIL moves above 665 and/or RTH above 76.53 (starting at 76.36). If UTIL stays above 662, or if RTH moves above 76.53, either one will do, and the SPX moves above 2298, Keybot will likely flip long, hence the imminent turn notation in the title line.

For the SPX starting at 2297, the bulls need one point higher, to move above 2298, and bingo, stocks will rally several points higher to 2305 and more. The bears need to push the SPX under 2288 to regain their mojo. A move through 2289-2297 is sideways action to begin the week. S&P futures are coy, not tipping their hands, up +1 or +2 points about five hours before the opening bell. The choppy sideways slop continues in markets chewing up bulls and bears alike. The stock market remains a coin flip.

Keybot prints one pre-scheduled number this week on Friday morning. UTIL 662, RTH 76.53 and SPX 2298-plus will tell the stock market direction story after the opening bell.

2/12/17; 7:00 PM EST =
2/10/17; 10:00 AM EST =
2/5/17; 7:00 PM EST = +68; signal line is +74
2/3/17; 12:58 PM EST = +68; signal line is +74
2/3/17; 11:28 AM EST = +84; signal line is +75 but algorithm remains short
2/3/17; 9:00 AM EST = +68; signal line is +74
2/2/17; 1:39 PM EST = +68; signal line is +75

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