Wednesday, July 5, 2017


Keybot the Quant remains bearish heading into the Thursday session after printing two numbers on Wednesday. Volatility turned bearish on hump day sending stocks lower but the bulls find a way to recover sending the VIX lower to prevent an all-out collapse in the stock market. The central banks maintain their jack boots on the neck of volatility. Chips also rally providing lift to stocks.

Market bears need VIX above 11.57 and the stock market will collapse. Utilities broke down further. Bulls need UTIL above 705.95, or GTX above 2220 or SOX above 1053 or RTH above 81.11. Any one of these parameters flipping into the bull camp will create lift in stocks and the caution flag will be out since the bulls will be trying to flip the model long. If two of the four parameters turn bullish, consider the imminent turn to be in play. If two of the four parameters turn bullish and the SPX prints above 2435, and remains above, Keybot will likely flip long.

Bears are praying for higher volatility, the VIX above 11.57, while the bulls need higher utes, commodities, semiconductors and/or retail stocks. The VIX begins trading at 3 AM EST so that will provide a heads-up for stock market direction on Thursday. The beat goes on.

7/7/17; 9:00 AM EST =
7/5/17; 10:57 AM EST = +38; signal line is +58
7/5/17; 9:51 AM EST = +24; signal line is +59
7/3/17; 11:31 AM EST = +38; signal line is +60

Note Added 6:14 AM EST on Thursday Morning, 7/6/17: The VIX moves above 11.57 to 11.61 at 5:55 AM EST (10:55 AM London; 11:55 AM Frankfurt).

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