STOCK MARKET BEARISH -- SHORT

Keybot the Quant flips to the short side yesterday at SPX 2761 as markets tanked. The choppy violent price action continues with the VIX around 20 and higher. Banks and retail stocks collapse. Utilizes fail but recover. The key SPX 2749 level fails so it was Goodnight Irene. The move was swift and sudden. The bears are in control with the algo number 19 points under the signal line.

Bears need weaker utilities to create more downside carnage. Bears need UTIL under 728.81.

Bulls need SPX above 2749, RTH above 106.38 and/or XLF above 26.98. Any one of the three will immediately stop the stock market downside. 2 of the 3 will create a relief rally. If the stock market rallies, but none of these three parameters move into the bull camp, stocks will stall, roll over and head lower.

The last trade only lasted for three days. The algo was on the long side but stocks collapse on the oil price reversal to the downside. Both the Keybot program and the actual trading lose a percent on the last trade. The S&P 500 benchmark index is up about +3% this year. The actual trading generated by Keybot is up +13% on the year with about 7 weeks remaining in 2018. Keybot exits SPY and enters SDS. The algo flips back into the 2x ETF mode since a 30-day timer expires from the last whipsaw move back on 10/9/18. The choppy action may continue, however (2x ETF's will chew you up in choppy whipsaw price action). Time will tell.

Stay alert for a whipsaw especially if the choppy action continues. SPX 2749 is the most important number that exists in the stock market right now. It separates the cyclical (weeks and months ahead) bull from the cyclical bear. The SPX begins Tuesday at 2726. S&P futures are +11.

11/18/18; 7:00 PM EST =

11/12/18; 3:56 PM EST = -20; signal line is -1

11/12/18; 10:58 AM EST = -4; signal line is +1

11/12/18; 9:50 AM EST = +10; signal line is +1 but algorithm remains short

11/12/18; 9:49 AM EST = -6; signal line is +2; go short 2761; (Benchmark SPX for 2018 = +3.3%)(Keybot algorithm program this trade = -0.8%; Keybot algo for 2018 = +3.6%)(Actual results this trade = -0.8%; Actual trading results for 2018 = +13.1%)

11/12/18; 9:36 AM EST = +10; signal line is +3

11/11/18; 7:00 PM EST = +26; signal line is +3

11/9/18; 10:00 AM EST = +26; signal line is +3

11/7/18; 12:11 PM EST = +26; signal line is +2

11/7/18; 11:05 AM EST = +10; signal line is +2

11/7/18; 10:46 AM EST = +26; signal line is +2
11/7/18; 10:02 AM EST = +10; signal line is +2

11/7/18; 9:36 AM EST = +26; signal line is +3; go long 2783; (Benchmark SPX for 2018 = +4.1%)(Keybot algorithm program this trade = +2.2%; Keybot algo for 2018 = +4.4%)(Actual results this trade = +2.2%; Actual trading results for 2018 = +13.9%)