Tuesday, July 30, 2019


Keybot the Quant remains long but is champing at the bit to go short. The drama continues with the Federal Reserve rate decision on tap tomorrow afternoon. The algo number is 9 points below the signal line so Keybot wants to flip short but the internal parameters will not yet fully latch to permit the move so the beat goes on.

If the SPX drops below 3001, Keybot will likely flip short. Hump day begins with the S&P 500 at 3013 so that would be a 13-point drop for the SPX. Bears need equities to sell off slow and steady and not display a gap-down move at the Wednesday open since this may activate an internal timer and delay any move to the short side for about 90 minutes.

Copper collapses on Tuesday after the bulls jammed it higher on Monday to try and support the stock market. Bulls need CPER above 16.94 (now at 16.78 creating market negativity) and/or GTX (commodities) above 2490 (now at 2487 creating market negativity).

Bears need higher volatility to create market mayhem. Bears need the VIX above 14.40 (now at 13.91 creating market positivity).

Note that all three parameters are pennies from their bull-bear lines in the sand. Copper, commodities and volatility are controlling stock market direction currently. Nothing else matters. Retail stocks are also starting to appear on the quant's radar.

Markets may idle sideways until the Fed decision at 2 PM EST followed by Chairman Powell's song-and-dance press conference at 2:30 PM EST. Wednesday afternoon may see wild price action.

Watch CPER 16.94, GTX 2490 and VIX 14.40; these Three Stooges tell you everything you need to know about stock market direction.Tomorrow is the end of July trading (EOM) which will be an up month.

7/31/19; 7:00 PM EST EOM =
7/30/19; 10:00 AM EST = +58; signal line is +67 but algorithm remains long
7/30/19; 9:36 AM EST = +58; signal line is +68 but algorithm remains long
7/29/19; 10:34 AM EST = +74; signal line is +69
7/29/19; 10:07 AM EST = +58; signal line is +70 but algorithm remains long
7/29/19; 9:40 AM EST = +74; signal line is +71
7/28/19; 7:00 PM EST = +58; signal line is +71 but algorithm remains long

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