STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the bulls sing happy songs. The bulls remain in control of the stock market with the algo number 18 points above the signal line. Copper explodes higher last week as investors believe that the global economy will snap back quickly from the coronavirus (COVID-19) tragedy.

Same dealio as the previous message. The bears must jam volatility higher or they will keep folding like a cheap suit. Bears need VIX above 31.69 (now at 27.98). The VIX prints in the 20's and drops sub 28 creating the upside orgy on Friday. Bulls will run the stock market show going forward in the short term as long as the VIX remains under 31.69.

Bulls need to keep jamming volatility lower; it obviously helps that the Federal Reserve and other global central bankers will maintain their jackboots on the throat of the VIX keeping it pinned to the ground and moving lower. Bulls need the SPX above 2987 and XLF above 23.03 to continue and firmly verify the rally. The banks need to rally to send the stock market higher. XLF begins the new week of trading at 22.29 so it has some work to do to help the bulls. If the financials rally, that will be hand and hand with the S&P 500 rallying higher.

The importance of the SPX 2987 bull-bear line in the sand cannot be overstated. SPX 2987 dictates whether the stock market will remain in a bear market pattern for the weeks and months, and perhaps a few years, ahead, or, if equities will receive the all-clear signal and it will be as if the virus stuff never happened. SPX 2987 tells you this answer. The S&P 500 begins at 2930.

If the VIX remains bullish and the SPX and XLF bearish, status quo, stocks will chop sideways with a slight upward bias.

As mentioned previously, if you see the VIX move above 31.69 for a while, then back below for a while, then back above for a while, then back below for a while, you get the idea, jog moves intraday, that tells you the model is gearing up to probably flip short. Thus, VIX 31.69 tells you what you need to know about market direction and keep an eye on SPX 2987 since it is a complete game-changer if it occurs. Bears will rule the stock market going forward this year, in the intermediate and long-term, for the weeks and months ahead, as long as the SPX remains below 2987.

Keybot prints a pre-scheduled number this week on Friday morning shortly after the opening bell. The bulls now place their future hopes and dreams in the hands of the banks and insurance companies. The bears keep trying to punch the VIX beachball free from the central banker's crushing grasp. If the VIX pops above 31.69, consider the imminent turn to the short side to be immediately in play.

5/17/20; 7:00 PM EST =

5/15/20; 10:00 AM EST =

5/10/20; 7:00 PM EST = -23; signal line is -41

5/8/20; 9:00 AM EST = -23; signal line is -42

5/7/20; 9:30 AM EST = -23; signal line is -43; go long 2887; (Benchmark SPX for 2020 = -10.7%)(Keybot algo this trade = -1.1%; Keybot algo for 2020 = +2.8%)(Actual trading results this trade = -3.0%; Actual trading results for 2020 = -4.7%)