The chart shows the Keybot the Quant's turn signals over the last year. It is interesting to look back especially recalling how the algorithm remained stubbornly short in January as the stock markets partied higher day after day. That joy ended quickly into the early February low.
April into early May was a lot of whipsaw choppy action then the bulls took over. Instead of "Sell in May and Go Away" it was "Buy in May and Receive a Big Pay-Day."
Keybot flipped nicely short on 10/4/18 which would have been a perfect set up for the crash last week, however, the tricky bulls lured the algo back to the bull side. That resulted in the quick whipsaw back to the short side and the rout was on in equities. The wild and large moves in stock prices will continue both intraday and day to day due to the higher volatility. The VIX prints a 26-handle last week when only days before had an 11-handle.
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