STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 2442 at lunchtime today. Lo and Behold! Sound the seven trumpets! After several fake-outs to the downside over the last couple weeks, the algo finally flips into the bear camp. As always, remain alert for a potential whipsaw back to the long side tomorrow.

Commodities, copper and weak retail stocks are causing the sell off in equities. Copper, retail stocks and volatility are most directly impacting stock market direction currently; watch JJC 29.41, RTH 81.50 and VIX 11.62. These three parameters determine if the bears continue to win going forward, or, if the bulls retake control.

Copper and retail stocks are in the bear camp creating market downside. Volatility is in the bull camp creating market upside. Market bears need VIX above 11.62 (now at 10.86) and stocks will begin falling apart in earnest to the downside.

Market bulls need either JJC above 29.41 (now at 29.06) and/or RTH above 81.50 (now at 80.63). Bulls got nothing unless they pump copper and/or retail stocks higher.

Thus, watch copper futures trading overnight for a hint on stock market direction tomorrow (Wednesday). Ditto volatility. The VIX begins trading at 3 AM EST. Also listen for any news on retail stocks; if it is good news that tells you the bulls will stage a comeback. If the retail news is bad that will give extra strength to bears to push stocks lower.

On the last trade, the Keybot the Quant algorithm computer program gains +2.2% and is now up +1.5% on the year. The actual trading is nearly back to flat on the year after a weak start due to the low volatility and sideways choppy stock market activity. Keybot exits SSO and enters SDS remaining in the 2x ETF's. The benchmark S&P 500 is up a huge +9.1% this year and the first half of the year is not even over.

Bears are cheering for VIX 11.62 since carnage will result. Bulls need JJC 29.41 or RTH 81.50 which will stop the stock market selling and restart the upside rally. If volatility remains bullish and copper and retail stocks bearish, the stock market will stagger along sideways with a slight downward bias. The caution flag remains out since tomorrow will be a very important day to see if the bears develop downside legs, or not.

6/25/17; 7:00 PM EST =

6/20/17; 12:28 PM EST = +54; signal line is +67; go short 2442; (Benchmark SPX for 2017 = +9.1%)(Keybot algo this trade = +2.2%; Keybot algo for 2017 = +1.5%)(Actual results this trade = +4.6%; Actual results for 2017 = -0.6%)

6/20/17; 9:36 AM EST = +54; signal line is +67 but algorithm remains long

6/19/17; 1:19 PM EST = +70; signal line is +67

6/19/17; 12:58 PM EST = +86; signal line is +67

6/19/17; 10:58 PM EST = +70; signal line is +66

6/19/17; 10:36 PM EST = +54; signal line is +66 but algorithm remains long

6/19/17; 10:07 PM EST = +70; signal line is +66

6/18/17; 7:00 PM EST = +54; signal line is +66 but algorithm remains long

6/16/17; 10:00 AM EST =+54; signal line is +67 but algorithm remains long

6/16/17; 9:00 AM EST = +54; signal line is +68 but algorithm remains long

6/15/17; 3:57 PM EST = +54; signal line is +69 but algorithm remains long

6/15/17; 12:27 PM EST = +70; signal line is +71 but algorithm remains long

6/15/17; 10:37 AM EST = +54; signal line is +71 but algorithm remains long

6/14/17; 9:36 AM EST = +70; signal line is +72 but algorithm remains long

6/13/17; 1:26 PM EST = +86; signal line is +72

6/13/17; 11:01 AM EST = +70; signal line is +71 but algorithm remains long

6/13/17; 10:11 AM EST = +86; signal line is +71

6/13/17; 9:36 AM EST = +70; signal line is +70 but algorithm remains long

6/12/17; 3:08 PM EST = +86; signal line is +71

6/12/17; 9:45 AM EST = +72; signal line is +71

6/11/17; 7:00 PM EST = +86; signal line is +72

6/8/17; 10:05 AM EST = +86; signal line is +71

6/7/17; 1:30 PM EST = +70; signal line is +71 but algorithm remains long

6/7/17; 12:53 PM EST = +54; signal line is +71 but algorithm remains long

6/7/17; 11:58 AM EST = +70; signal line is +71 but algorithm remains long

6/5/17; 3:03 PM EST = +54; signal line is +70 but algorithm remains long

6/5/17; 10:08 AM EST = +70; signal line is +69

6/4/17; 7:00 PM EST = +54; signal line is +68 but algorithm remains long

6/2/17; 9:00 AM EST = +54; signal line is +69 but algorithm remains long

5/31/17; 7:00 PM EST EOM = +54; signal line is +69 but algorithm remains long

5/30/17; 10:00 AM EST = +54; signal line is +69 but algorithm remains long

5/30/17; 9:36 AM EST = +54; signal line is +69 but algorithm remains long

5/28/17; 7:00 PM EST = +70; signal line is +69

5/26/17; 10:00 AM EST = +70; signal line is +69

5/25/17; 2:36 PM EST = +70; signal line is +69

5/25/17; 11:58 AM EST = +86; signal line is +69

5/25/17; 11:48 AM EST = +70; signal line is +68

5/25/17; 10:57 AM EST = +86; signal line is +68

5/25/17; 9:36 AM EST = +100; signal line is +68

5/24/17; 3:36 PM EST = +84; signal line is +67

5/24/17; 2:08 PM EST = +68; signal line is +66

5/24/17; 12:26 PM EST = +84; signal line is +66

5/24/17; 12:24 PM EST = +68; signal line is +65

5/24/17; 12:00 PM EST = +54; signal line is +65 but algorithm remains long

5/24/17; 11:01 AM EST = +68; signal line is +66

5/23/17; 3:09 PM EST = +84; signal line is +65

5/23/17; 2:28 PM EST = +100; signal line is +63

5/23/17; 2:16 PM EST = +84; signal line is +62

5/23/17; 9:36 AM EST = +68; signal line is +59

5/22/17; 1:18 PM EST = +84; signal line is +58

5/22/17; 9:38 AM EST = +68; signal line is +57; go long 2390; (Benchmark SPX for 2017 = +6.7%)(Keybot algo this trade = -0.6%; Keybot algo for 2017 = -0.7%)(Actual results this trade = -0.9%; Actual results for 2017 = -5.2%)