Wednesday, January 17, 2018

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short as the odd start to the year continues. Keybot has not printed any numbers as yet this week. Volatility remains elevated and utilities have crashed but the stock market continues higher. The market action is erratic and historic. The VIX is above its 200-day MA and stocks are moving higher; there is some strange stuff going on under the surface.

The Keybot algo has never gone this long without flipping in the direction of the current market trend (the stock market trend has been higher this year but the robot oddly remains short). This odd behavior has never occurred in the entire existence of the Keybot algo; well over a decade. That gives you an idea as to how odd and rare the stock market behavior is currently. It is fascinating to see how it plays out over the coming days.

The algorithm is tracking volatility and copper as the two key parameters most impacting market direction currently. The bulls need VIX below 10.20 (now at 11.91). If volatility turns bullish, and the SPX moves above 2807, Keybot will likely flip long. Hence the imminent turn notation lingers in the title line.

The market bears need weaker copper to start sending stocks lower. Bears need JJC under 36.05 (now at 36.38). Copper futures trade overnight. The VIX begins trading at 3 AM EST. Thus, you can gauge how the stock market is likely to move on Thursday way before the opening bell.

If volatility remains elevated and copper is printing negatively, the bears will growl and take the stock market lower in the Thursday session. If volatility drops under 11 and is heading lower towards and below 10.20, the bears are toast and the stock market is going to run higher.

Keybot prints a pre-scheduled number tomorrow at 9 AM.

1/19/18; 10:00 AM EST =
1/18/18; 9:00 AM EST =
1/14/18; 7:00 PM EST = +54; signal line is +65

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