Thursday, June 15, 2017


Keybot the Quant remains long but is champing at the bit to go short. Copper failed yesterday but is trading marginally higher this morning. As long as JJC remains below 29.47, the softness in the stock market should continue. Bulls need JJC back above 29.47 as soon as possible.

Keybot wants to flip short but the all the parameters are not yet latching to allow the move. If the SPX drops under 2428 this morning (Thursday), the algo will likely flip short but the market bears need a slow and steady move lower not a gap-down or plunge lower that typically leads to a spike higher. Bears have it on a silver platter if they want it. The SPX dropped to yesterday's target but then bounced into the closing bell.

The market selling will seriously accelerate if VIX moves above 11.64. If stocks sell off but the VIX does not move above 11.64, the selling event will likely be short-lived and the bulls will recover.

Thus, bears win big and the model will likely flip to the short side if the SPX price moves down through 2428 heading lower. Extra juice and a downside confirmation occurs with VIX above 11.64.

Higher copper will save the market bulls. If JJC moves above 29.47, the market bulls are back on easy street with the stock market moving higher. Copper and volatility are the two main parameters controlling broad stock market direction currently. Bears win big with VIX above 11.64. Bulls win big with JJC above 29.47.

6/18/17; 7:00 PM EST =
6/16/17; 10:00 AM EST =
6/16/17; 9:00 AM EST =
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

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