STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short. The algo prints 14 numbers yesterday a very active session. The bulls were full of bluster in the Monday session and then folded like a cheap suit into the closing bell. The bears are in charge of stock market direction with the algo number 20 points below the signal line. However, the bulls continue knocking at the door and S&P futures are up over 30 points about 3-1/2 hours before the opening bell for the regular US Tuesday trading session.

The bulls want to come and play on Tuesday so we will see what they got. Bulls need RTH above 119.90, XLF above 30.26, SOX above 1823 and/or VIX below 13.93. All four parameters are currently in the bear camp creating the stock market sogginess. The strength of the bullish relief rally directly depends on these four parameters. In other words, the move higher in the SPX is not as important as how many of the above four parameters flip bullish because this tells you the lasting strength of the stock market for the days ahead, or lack of strength if that will be the case.

If 1 of the 4 turn bullish, stocks will rally higher and the selling is over. If 2 of the 4 turn bullish, and the SPX moves above 3268, Keybot will likely flip long. If 3 of the 4 turn bullish, Keybot would likely flip long immediately regardless of SPX price, hence the imminent turn (to the long side) is in the title line and on the table.

Bears can allow one parameter to turn bullish without much damage but will be in trouble if 2 or more of the 4 parameters turn bullish. The stage is set. Don't worry so much about the rally in the stock indexes, instead monitor the 4 parameters since they tell you the true path forward.

Another thing you can watch is the first few minutes of price action in the S&P 500. Record the high print after the first 6 minutes of trading. Stocks may pop wildly higher after the opening bell, as the futures indicate, but may fall on their sword. So watch that SPX price high during the first minutes of trading. If the bears hold that level and prevent the S&P 500 from moving higher, they will have hope to hold back the bull rally.

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/3/20; 3:41 PM EST = +8; signal line is +28

2/3/20; 3:36 PM EST = +24; signal line is +30

2/3/20; 3:29 PM EST = +40; signal line is +30 but algorithm remains short

2/3/20; 3:18 PM EST = +24; signal line is +31

2/3/20; 3:10 PM EST = +40; signal line is +31 but algorithm remains short

2/3/20; 1:55 PM EST = +24; signal line is +32

2/3/20; 1:43 PM EST = +40; signal line is +33 but algorithm remains short

2/3/20; 1:18 PM EST = +24; signal line is +33

2/3/20; 12:52 PM EST = +40; signal line is +34 but algorithm remains short
2/3/20; 12:38 PM EST = +24; signal line is +34

2/3/20; 12:24 PM EST = +40; signal line is +35 but algorithm remains short

2/3/20; 11:41 AM EST = +24; signal line is +35

2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short