STOCK MARKET BEARISH -- SHORT

Keybot the Quant is on the short side since Monday morning from SPX 2758. The drop in banks, commodities and copper create the weakness. It is very surprising that the algo number is a large 32 points below the signal line but the stock market remains buoyant. S&P futures are up +10 as this message is typed about three hours before the opening bell for hump day.

On the last trade, the algo program gains a percent but the actual trading only logs a half-percent gain. Keybot exits SPY and enters SDS. The 35-day timer expires on maintaining single ETF's due to whipsaw market behavior so Keybot is back in the 2x ETF's starting with SDS on the short side. The S&P 500 benchmark is up +3.1% on the year. The algorithm program is up +2.2% on the year. The actual trading implemented by Keybot is up +6.5% this year.

Bears need weaker chips and utilities and higher volatility. Bulls need higher banks, commodities, NYA Index and copper.

If the algo's current status is boiled down to something simple, bears will win with the status quo (again, it is surprising to not see stocks sell off currently) and will create more downside trouble in the stock market if SOX falls below 1374 (now at 1392).

The bulls can stall the downside in stocks if NYA moves above 12647 (now at 12639), GTX above 2689 (now at 2677) and/or XLF above 27.71 (now at 27.35). Any one of these will help the bulls stage a recovery rally and the caution flag will be warranted but overall, at least two of the parameters need to turn bullish to try and create a sustainable rally. The imminent turn notation will be in the title line if two parameters turn bullish.

If all three parameters flip bullish, Keybot will likely flip back into the bull camp. The NYA 12647 bull-bear line in the sand dictates the direction of the stock market in the intermediate term (weeks and months ahead). The beat goes on.

6/24/18; 7:00 PM EST =

6/19/18; 10:48 AM EST = +24; signal line is +56

6/19/18; 10:40 AM EST = +8; signal line is +57

6/19/18; 9:36 AM EST = +24; signal line is +58

6/19/18; 9:00 AM EST = +52; signal line is +58

6/18/18; 12:48 PM EST = +52; signal line is +57

6/18/18; 9:36 AM EST = +38; signal line is +57; go short 2758; (Benchmark SPX for 2018 = +3.1%)(Keybot algorithm program this trade = +0.9%; Keybot algo for 2018 = +2.2%)(Actual results this trade = +0.5%; Actual trading results for 2018 = +6.5%)

6/17/18; 7:00 PM EST = +54; signal line is +57 but algorithm remains long

6/15/18; 10:59 AM EST = +54; signal line is +57 but algorithm remains long

6/15/18; 10:00 AM EST = +68; signal line is +57

6/14/18; 9:36 AM EST = +68; signal line is +57

6/13/18; 3:54 PM EST = +68; signal line is +58

6/13/18; 3:09 PM EST = +84; signal line is +58

6/13/18; 2:07 PM EST = +68; signal line is +57

6/13/18; 12:56 PM EST = +84; signal line is +57

6/13/18; 11:47 AM EST = +68; signal line is +55
6/13/18; 9:42 AM EST = +84; signal line is +55
6/10/18; 7:00 PM EST = +68; signal line is +55
6/6/18; 11:14 AM EST = +68; signal line is +55

6/4/18; 10:14 AM EST = +52; signal line is +56 but algorithm remains long
6/4/18; 9:36 AM EST = +68; signal line is +57
6/3/18; 7:00 PM EST = +52; signal line is +57 but algorithm remains long

6/1/18; 2:11 PM EST = +52; signal line is +57 but algorithm remains long

6/1/18; 12:17 PM EST = +68; signal line is +57; go long 2734; (Benchmark SPX for 2018 = +2.2%)(Keybot algorithm program this trade = -1.2%; Keybot algo for 2018 = +1.3%)(Actual results this trade = -1.2%; Actual trading results for 2018 = +6.0%)