Monday, March 20, 2017


Keybot the Quant remains short but the algo is champing at the bit to go long. The algo number is one point above the signal line but the internal parameters will not yet fully latch to permit the move to the long side. Note that the bulls jogged copper, JJC, below and above the critical 30.46 bull-bear line in the sand which turned the model in the bulls favor. This was mentioned in the previous message; after a while you begin to notice patterns in the markets.

If the SPX touches and moves above 2380, Keybot will likely flip long, hence the imminent turn notation is in the title line. The bears need either JJC under 30.46 and/or RTH under 78.25 and/or VIX above 11.91. If any of the three turn bearish, Keybot will not flip to the long side and instead stocks will begin tumbling lower. If the downside in stocks occurs, the magnitude of the move lower is dictated as per if one, two or all three of the parameters turn bearish, or not. Watch copper overnight as an early indication on stock market direction for tomorrow. Bears need negative copper overnight while bulls will be happy with copper moving higher.The VIX begins trading at 4 AM EST so that will provide an early hint for market direction as well. 

For Tuesday, with the S&P 500 starting at 2373, the bulls need to push above 2380 to accelerate the upside and flip the algorithm long as explained above. Bulls would be best off with a slow and steady move higher in stocks rather than a gap-up move. The bears need to push below 2370 to accelerate the downside and regain control of market direction. A move through 2371-2379 is sideways action for Tuesday.

The bulls have it on a silver platter if they want it; they need SPX 2380. The bears will create downside selling in stocks with weaker copper, weaker retailers and/or higher volatility. The table is set for Tuesday. Which side will win?

3/26/17; 7:00 PM EST =
3/20/17; 3:55 PM EST = +86; signal line is +85 but algorithm remains short
3/20/17; 2:53 PM EST = +70; signal line is +85
3/19/17; 7:00 PM EST = +86; signal line is +86 but algorithm remains short

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.