Wednesday, July 24, 2019


Keybot the Quant remains short during Tuesday's 20-point pop in the S&P 500. Copper failed yesterday so the price action in the overall stock market was noise. Interestingly, stocks rallied on news of a resumption of the US-China trade talks but the number one key component that should have rallied on such news, copper, fell -0.6%. Housing stocks also crumbled in the up tape.

Same dealio today with the market parameters. Copper, commodities and volatility are controlling stock market direction this week thus far. Bears need higher volatility, the VIX above 14.39 (now at 13.06) which will crush equities.

Bulls need CPER above 16.98 (now at 16.91) and/or GTX above 2493 (now at 2475). Any 1 of the 2 turning bullish tells you that more upside is on the way for equities. If both turn bullish, the SPX is headed to more new all-time highs.

Copper is key since the bulls and bears are only separated by 7 pennies which is about 0.4%. Copper futures are currently trading up +0.3% so the bulls are pushing hard to try and get CPER above 16.98 after the opening bell for the regular session.

Interestingly, CPER above 16.98 for a few minutes may not be able to flip the model long, however, if it jogs, say above 16.98 for 10 minutes or so, then back below 16.98 for 10 minutes or a half-hour, then back above 16.98 again, that may set up the move for Keybot to want to flip long. Nonetheless, stocks remain a coin-flip so the imminent turn notation remain in the title line.

The S&P 500 would likely at least need to move above 3006 today for the model to flip long. The SPX begins at 3005 so the bulls only need a point higher to increase the likelihood that Keybot will flip long, but alas, S&P futures are down -9 with the VIX at 13.06 about 3 hours before the opening bell. 

Bulls need higher copper and commodities while bears need higher volatility. This is all that matters for stock market direction currently. The Mueller hearings begin in a couple hours which may create market angst or joy. 

7/28/19; 7:00 PM EST =
7/23/19; 9:36 AM EST = +58; signal line is +75
7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short

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