STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips to the long side at SPX 2433. The stock market rallies on news that Whitehouse strategist Stephen Bannon is out. Treasury Secretary Mnuchin and National Economic Advisor Cohn, former Goldman Sachs cronies, muscle Bannon out the door. The investment bankers and Wall Street always win.

Chips, financials and commodities leap to the bull side triggering the algorithm to flip long. It came on fast. The chips, however, have already reversed. Thus, bulls need SOX above 1074.30 (now at 1073.17) to prove that a solid stock market relief rally is underway. Bears need to push XLF under 24.65 (now at 24.67) and/or GTX under 2215.70 (now at 2218.40) to prove that the downside selling in the stock market will resume. The bulls would also benefit from the VIX moving below 11.41 (now at 14.56).

Note how close the bull-bear battle is for the semiconductors, banks and commodities. Flip a coin. Markets are very erratic and unstable. A whipsaw back to the short side may occur. Watch the chips as the key signal. If SOX moves above 1074.30, the upside rally for equities is real. If SOX stays under 1074.30 the bears will prevent further upside in stocks.

On the last trade, the Keybot computer program gained +0.9% for a cumulative gain of over +4% this year thus far. The actual trading gains +1.6% on the last trade and is now up nearly +5% on the year. Remember, the actual trading was negative for the entire first half of this year. Keybot exits SDS and enters SSO remaining in 2x ETF's. The benchmark SPX is up +8.7% this year. Stay alert for a potential whipsaw. Chips, banks and commodities are controlling stock market direction currently.

8/27/17; 7:00 PM EST =

8/20/17; 7:00 PM EST =

8/18/17; 1:49 PM EST = +54; signal line is +69 but algorithm remains long

8/18/17; 12:17 PM EST = +70; signal line is +69; go long 2433; (Benchmark SPX for 2017 = +8.7%)(Keybot algo this trade = +0.9%; Keybot algo for 2017 = +4.3%)(Actual results this trade = +1.6%; Actual results for 2017 = +4.8%)

8/18/17; 11:31 AM EST = +56; signal line is +70

8/18/17; 11:25 AM EST = +40; signal line is +71

8/18/17; 10:00 AM EST = +24; signal line is +73

8/17/17; 3:54 PM EST = +23; signal line is +75

8/17/17; 3:47 PM EST = +39; signal line is +78

8/17/17; 3:39 PM EST = +55; signal line is +80

8/17/17; 3:23 PM EST = +39; signal line is +82

8/16/17; 9:00 AM EST = +55; signal line is +83

8/14/17; 11:57 AM EST = +55; signal line is +85

8/14/17; 9:36 AM EST = +69; signal line is +85

8/13/17; 7:00 PM EST = +53; signal line is +85

8/10/17; 10:07 AM EST = +53; signal line is +86

8/10/17; 10:05 AM EST = +69; signal line is +88; go short 2455; (Benchmark SPX for 2017 = +9.7%)(Keybot algo this trade = +1.2%; Keybot algo for 2017 = +3.4%)(Actual results this trade = +2.5%; Actual results for 2017 = +3.2%)