STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant flips back to the long side on Tuesday, 1/28/20, in the afternoon at SPX 3283. The bulls goosed the retail stocks and banks to push stocks higher. The Fed started applying its jackboot onto the throat of volatility, sinking the VIX, which also squeezes out more upside price action for stocks. The algo was very active in the Tuesday session printing 10 numbers including the pre-scheduled number.

Despite the algo on the long side, the bears have the upper hand stabbing the banks in the ribs with a shiv right before the stock market closed. The algo number is 11 points below the signal line so Keybot is champing at the bit to whipsaw back to the short side. If the SPX drops below 3253 trending lower, Keybot will likely flip short, hence the imminent turn is in the title line. As the banks go, so goes the stock market. Bulls need XLF above 30.32 to continue the relief rally.

Bears must keep the financials weak with XLF remaining below 30.32, while pulling retail stocks lower. Bears need RTH below 119.96 to restart the stock market negativity.

Bulls need the VIX below 13.60, if this occurs, stocks will be catapulting higher. If the stock market rallies today, but the VIX does not go sub 13.60, it is a fake-out move and stocks will likely weaken again. The VIX is currently trading at the 15.51 palindrome three hours before the opening bell for the regular US hump day trading session.

Thus, bulls win by keeping retail stocks strong, rallying the banks and pushing volatility lower. Bears win by keeping the banks weak, slapping the retailers lower and pushing volatility higher.

Stay alert for a whipsaw in these erratic markets. It will be unfortunate for both bulls and bears if markets go into a sideways choppy pattern for a few weeks since that only serves to turn everyone into mince meat and chop suey. If XLF moves above 30.32, the bulls will be in firm control of the stock market.

On the last trade, which ran about four days, the algo program gains +0.6% and the actual trading gains +0.8%. For the year thus far, after 3-1/2 weeks of trading, the S&P 500 benchmark index is up +1.6%. The Keybot the Quant algorithm program is up almost +3% and the actual trading generated by Keybot is up over +10%. Keybot exits QID and enters QLD remaining in the 2x leveraged ETF's.

Remember, as the banks go, so goes the markets. S&P futures are up +8. Also remember, if stocks rally, but the VIX cannot drop below 13.60, equities will likely weaken again going forward. You can also use VIX 14.97 as an early signal; below 14.93 tells you the bulls are strong and gathering strength. If the bulls cannot push the VIX below 14.97, they got butpkis. The beat goes on.

2/2/20; 7:00 PM EST EOM =

1/31/20; 10:00 AM EST =

1/28/20; 3:51 PM EST = +40; signal line is +51 but algorithm remains long

1/28/20; 3:30 PM EST = +56; signal line is +51

1/28/20; 3:13 PM EST = +40; signal line is +52 but algorithm remains long

1/28/20; 2:14 PM EST = +56; signal line is +53; go long 3283; (Benchmark SPX for 2020 = +1.6%)(Keybot algo this trade = +0.6%; Keybot algo for 2020 = +2.9%)(Actual trading results this trade = +0.8%; Actual trading results for 2020 = +10.4%)

1/28/20; 1:40 PM EST = +40; signal line is +55

1/28/20; 11:57 AM EST = +56; signal line is +56 but algorithm remains short

1/28/20; 11:13 AM EST = +40; signal line is +58

1/28/20; 10:38 AM EST = +56; signal line is +60
1/28/20; 10:22 AM EST = +40; signal line is +61
1/28/20; 10:00 AM EST = +24; signal line is +62
1/27/20; 9:36 AM EST = +24; signal line is +65
1/26/20; 7:00 PM EST = +56; signal line is +66

1/24/20; 3:54 PM EST = +56; signal line is +68

1/24/20; 3:45 PM EST = +40; signal line is +68

1/24/20; 3:08 PM EST = +56; signal line is +70

1/24/20; 3:02 PM EST = +40; signal line is +70

1/24/20; 2:07 PM EST = +24; signal line is +72
1/24/20; 2:00 PM EST = +40; signal line is +74
1/24/20; 11:24 AM EST = +56; signal line is +75

1/24/20; 11:04 AM EST = +70; signal line is +76

1/24/20; 10:35 AM EST = +56; signal line is +75

1/23/20; 1:25 PM EST = +70; signal line is +76
1/23/20; 1:06 PM EST = +56; signal line is +75
1/23/20; 12:14 PM EST = +70; signal line is +76

1/23/20; 11:00 AM EST = +56; signal line is +75
1/23/20; 10:34 AM EST = +70; signal line is +76
1/23/20; 10:27 AM EST = +56; signal line is +76
1/23/20; 10:12 AM EST = +70; signal line is +76

1/23/20; 9:36 AM EST = +56; signal line is +76; go short 3304; (Benchmark SPX for 2020 = +2.3%)(Keybot algo this trade = +2.3%; Keybot algo for 2020 = +2.3%)(Actual trading results this trade = +9.6%; Actual trading results for 2020 = +9.6%)