STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the bulls party to new all-time highs. The S&P 500 prints a HOD Friday at 3027.39 teasing the all-time record high at 3027.98 from 7/26/19 (only 59 pennies away). The SPX ends the day at 3022.55 compared to the all-time record high close at 3025.86 on 7/26/19 (only about 3 bucks away but price was above the closing record high during the session). The bulls are singin' songs and carryin' on euphorically buying stocks without a care in the world.

The algorithm prints the pre-scheduled number on Friday but has idled quietly sideways since mid-week uninspired to move in either direction. Banks and chips catapult the stock indexes to the new record highs. A steeper yield curve creates banker joy. The SOX prints another record high. Happy US-China trade chatter and the never-ending central banker money-printing sends stocks to the euphoric highs.

It is interesting that the past record highs in the SPX came with the quant at or near +100 but this time around it is at +88 which would be viewed as a long-term negative divergence. For now, the bulls are on easy street. The Fed jammed the VIX down to a 12-handle to create stock market joy. Investors are singing, "Happy Days Are Here Again."

The caution flag remains out. Despite the upside joy, the algo number is only 18 points above the signal line so the stock market direction could change quickly. The week ahead is jam-packed with market moving events; Consumer Confidence on Tuesday, the Fed decision and GDP data Wednesday, the PCE inflation data and EOM on Thursday, Halloween, and Jobs and ISM on Friday.

10/27/19; 7:00 PM EST =

10/25/19; 10:00 AM EST = +88; signal line is +70

10/23/19; 10:33 AM EST = +88; signal line is +67