STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. The algo was quiet on hump day, when Chairman Powell was tap-dancing, but prints six numbers yesterday. Volatility and banks failed yesterday creating the bulk of the downside negativity. The bears are cruising along with the algo number 43 points below the signal line.

The current battle for stock market direction is waged by volatility, banks, the SPX Index and you can sprinkle in some commodities as well. The Keybot the Quant algorithm is tracking the following bull-bear levels; VIX 35.80, XLF 23.31, SPX 3001 and GTX 1698, respectively.

Bears need to maintain high volatility, weak banks and weak commodities while pushing the SPX below 3001. The SPX begins the session at 3002 only 1 measly point in the bull camp but S&P futures are up +46 points as this is written 5 hours before the opening bell for the regular US Friday trading session. If SPX 3001 fails, it is lights-out for the US stock market for the remainder of the year. Equities will trail lower and lower and a crash scenario is on the table. Bulls will weather the storm and at a minimum create sideways choppiness as long as they prevent the SPX from losing 3001.

The bulls need lower volatility and the VIX below 35.80 to stop the pain. The VIX pops above 40 during yesterday's stock market carnage but drops 3 figures overnight currently trading at 37.10 perhaps on the way to a 36 handle. The central banks are in there wresting Uncle Vix to the ground, placing their jackboots on his neck to keep him down. Bulls need the XLF above 23.31 pronto so watch the pre-market to see how the banks are doing. Bulls would also benefit from stronger commodities with GTX above 1698. This is dependent on the US dollar; weaker dollar is higher commodities and visa versa.

Keep watching utilities. UTIL is collapsing after failing to attain the critical 839-840 level. This is extremely bad news for stocks going forward. UTIL is at 793 losing the 8 hundo level. Bulls need UTIL above 839 which will signal the all-clear for stabilization in the stock market and a bull rally. UTIL under 839 will create continued weakness in equities. The critical week is the following week, 6//22/20 thru 6/26/20. UTIL must be below 763 by Monday, 6/22/20, otherwise the bulls will stage a comeback during this time. If UTIL keeps drifting lower, and next week it drops below 763 (only 30 points lower), Katy bar the door, the stock market may crash.

So that is a lot to chew on but now you know what to watch to forecast market direction. Keybot prints a pre-scheduled number shortly after the opening bell this morning.

SPX 3001 is for all the marbles. Death and destruction occurs in the stock market if it fails. Since futures are running higher this is likely not on the table after the opening bell but the day is long. Watch the banks. XLF 23.31 will immediately verify equity direction. If stocks rally, as futures suggest, but the banks will not go into the bull camp, stocks will roll over and die. If stocks rally, and XLF moves above 23.31, the bulls are stabilizing markets, so watch VIX 35.80 next which would signal an all-clear for a relief rally. Markets remain erratic and unstable.

6/14/20; 7:00 PM EST =

6/12/20; 10:00 AM EST =

6/11/20; 2:58 PM EST = -23; signal line is +20

6/11/20; 2:07 PM EST = -7; signal line is +21

6/11/20; 2:00 PM EST = +7; signal line is +22

6/11/20; 1:44 PM EST = -7; signal line is +22

6/11/20; 1:21 PM EST = +7; signal line is +23
6/11/20; 12:54 PM EST = -7; signal line is +23

6/9/20; 3:59 PM EST = +7; signal line is +24