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

Keybot the Quant remains short but the algorithm is champing at the bit to go long. The bears are in control of the stock market but the bulls want the ball back with the algo number 7 points above the signal line. The internal parameters would not fully latch to permit the move to the long side yesterday. Today, Tuesday, the bulls have an easier path. If the SPX moves above 3054, only a 1 point gain, Keybot will likely flip long. A gap-up opening would not help the bulls; it may actually delay the turn. S&P futures are jumpy overnight going negative at 1:30 AM EST now down -8 about 5-1/2 hours before the opening bell for the regular US trading session. VIX is higher at the 32.23 palindrome.

The bears need to prevent SPX 3054 with all their might, otherwise, they will fold like a cheap suit. Bears need to push the VIX above 37.42 if they want to create market carnage. The SPX fell to the 3002 that Keybot called out ahead of time, and bounced. The bulls, and the Fed, knew it was lights out under 3002, the cliff edge, so the central bank jackboots stood on the neck of volatility and equities floated higher into the closing bell.

Bulls need stronger banks and commodities. Bulls need XLF above 23.20 (now at 22.83) and GTX above 1680 (now at 1613) and stocks will be rallying to new record highs. As explained in previous posts, the utilities helped the bulls yesterday giving the stock market a leg up out of the gate.

There is something 'velly intalesting' going on under the surface. The comparison number for utilities is UTIL 646 for the next three days and then 759 for 7/6/20 through 7/10/20. UTIL rallied a big +2% yesterday above 764. Few noticed. The bulls know they must move UTIL above 759 before next week or the stock market is screwed. Watch that UTIL 759 bull-bear line in the sand very closely the next few days into and through next week especially this Thursday at 4 PM EST when US markets close until Monday. If UTIL ends this week sub 759, the stock market is in big trouble for next week. If UTIL ends this week above 759, this will provide encouragement and support to the stock market next week.

Summing up all that windbag stuff, if the SPX gains one point, Keybot will likely flip long. Bulls will receive lots of upside energy if XLF moves above 23.20 and/or GTX above 1680. Bears will receive downside energy if they stop SPX 3054 from happening while also pushing the VIX above 37.42 (pushing volatility higher in general) and UTIL below 759.

Bulls are cheering for positive S&P futures and higher banks and commodities. Bears are cheering for negative S&P futures, higher volatility and weaker utilities. Keybot prints two pre-scheduled numbers today as the month, quarter and first half of the year of trading ends. Whoopsies daisies. S&P futures now off -12.

7/5/20; 7:00 PM EST =
7/2/20; 9:00 AM EST =

6/30/20; 7:00 PM EST EOM EOQ2 EOH1 =

6/30/20; 10:00 AM EST =

6/29/20; 9:36 AM EST = +7; signal line is 0 but algorithm remains short

6/28/20; 7:00 PM EST = -9; signal line is -2