Saturday, August 1, 2020


Keybot the Quant remains short in this period of market insanity. The price action is erratic, unstable and all over the map. Machines are trading against machines. The bulls had it on a silver platter Friday morning but the one thing occurred which is not good for them; the gap-up open. That resulted in a flame-out and then the bears ruled the day, until the last 90 minutes when the Fed panicked as usual and stepped in to crush volatility's neck with its jackboots. The VIX collapses and stocks shoot to the moon into the closing bell.

Both the critical NYA index and the utilities failed Friday morning. No doubt Powell likely called an emergency internal meeting to address the situation; the Fed has smart technicians working for them. The NYA and UTIL not only signaled trouble for the Friday session but more importantly, trouble for the stock market into year-end. Utes were then goosed higher which reinforced the upside move into the bell. Comically, the NYA crosses above the critical 12452 bull-bear line in the sand during the last minute of trading. It's just another day in the corrupt and rigged crony capitalism system.

So the quant is champing at the bit to go long with the algo number 15 points above the signal line but the internal parameters will not yet fully latch to permit the move. If the final and high SPX print would have occurred a few minutes earlier, Keybot would likely be long right now.

Thus, the opening bell on Monday morning should be quite fascinating. Again, the bulls have it on a silver platter and only need a point higher in the SPX to likely flip the model long, however, a gap-up open is not helpful for bulls. Bears simply need NYA back below 12452 which would immediately end the bullish joy. SPX 3272 (for happy bulls) and NYA 12452 (for happy bears) are the only two things that matter come Monday morning. Commodities will also be in play during the session so watch the GTX 1691 bull-bear line in the sand.

July trading is in the bag (EOM) and August trading begins Monday. The price action is historic these days. The choppy whipsaw action continues chewing up bulls and bears alike.

8/2/20; 7:00 PM EST EOM =
7/31/20; 3:59 PM EST = +53; signal line is +38 but algorithm remains short
7/31/20; 3:24 PM EST = +39; signal line is +38 but algorithm remains short
7/31/20; 11:37 AM EST = +23; signal line is +39
7/31/20; 10:12 AM EST = +39; signal line is +41
7/31/20; 10:00 AM EST = +53; signal line is +42 but algorithm remains short
7/30/20; 2:42 PM EST = +53; signal line is +42 but algorithm remains short

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