STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips back to the long side yesterday morning at SPX 3322. The chop suey continues. The bulls pumped commodities, banks and the NYA index higher so the fix was in for a bit more upside, perhaps into tomorrow morning's US Jobs Report. The price action is fascinating.

Did you watch the utes? UTIL pops to 835.73 where it receives another spank down from this critical level that the model identifies before it occurs. Despite the bullish euphoria right now, it is very troublesome that UTIL cannot get above the critical 835.50-ish bull-bear resistance. It is the final prize the bulls need to prove that they can catapult stocks even higher. Stocks have likely reached their peak if UTIL remains below 835 and trending lower. UTIL fell during the session,  after its tease with glory, and will begin the Thursday session at 825.37.

For bears to be happy about utilities signaling carnage ahead, UTIL has to drop below 795 by tomorrow, and for the next couple-three weeks, fall below, and trend below, the 760-765 area. Thus, that is a big 65-point retreat from current levels but in these markets anything can happen. If UTIL ventures lower, sub 800, and dropping, and loses that 750-770 area, the US stock market will be vulnerable to a major crash. If the stock market retreats in the near-term, but utilities remain flat or somewhat buoyant, and UTIL remains above 8 hundo, the market selloff will not be too drastic. Utilities can act as one of your navigational instruments going forward.

The stock market is blown-out to the upside; it is remarkable. Utilities are the only fly in the ointment. As explained above, bulls need UTIL above 835.50-ish for the SPX to print new all-time highs. If UTIL remains sub 835, the market chop probably continues until the jobs report tomorrow. Bears need utilities to fall like rocks which would usher in some equity softness but more importantly need weaker commodities, banks and NYA index: all three have catapulted into the sky over the last couple days. The market parameters are bullish with cushion, it is as if the stock market is on a permanent plateau right now, as Irving Fisher would say.

On the last trade, another chop, that only lasted four trading days, the algo program loses -3.1% and the actual trading dumps -6.0%. That is the most the actual trading lost probably in a couple years; the data would have to be searched. It is simply the nature of the markets, right now; chop suey. Keybot the Quant exits SDS and enters QLD remaining in the 2x leveraged ETF's. On the year, the S&P 500 benchmark index, which is the United States stock market, turns positive up about +3% after seven months of trials and tribulations. The algo program is up +21% on the year and the actual trading generated by Keybot the Quant is up +27% on the year.

Stay alert for a whipsaw back to the short side although it wold likely occur more due to a negative news story hitting the wires rather than the technicals. Markets remain very erratic and unstable. Traders and investors likely want to wait for the jobs report tomorrow morning to assess the strength, or lack thereof, of the US economy.

8/9/20; 7:00 PM EST =

8/7/20; 9:00 AM EST =

8/5/20; 9:37 AM EST = +53; signal line is +40; go long 3322; (Benchmark SPX for 2020 = +2.8%)(Keybot algo this trade = -3.1%; Keybot algo for 2020 = +21.2%)(Actual trading results this trade = -6.0%; Actual trading results for 2020 = +26.9%)

8/2/20; 7:00 PM EST EOM = +53; signal line is +39 but algorithm remains short

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

7/30/20; 1:36 PM EST = +37; signal line is +43

7/30/20; 12:22 PM EST = +53; signal line is +43 but algorithm remains short

7/30/20; 11:08 AM EST = +37; signal line is +44

7/30/20; 11:05 AM EST = +23; signal line is +45

7/30/20; 10:59 AM EST = +39; signal line is +46

7/30/20; 10:39 AM EST = +25; signal line is +47

7/30/20; 10:19 AM EST = +9; signal line is +47

7/30/20; 9:59 AM EST = +23; signal line is +49

7/30/20; 9:43 AM EST = +37; signal line is +50; go short 3222; (Benchmark SPX for 2020 = -0.3%)(Keybot algo this trade = -0.6%; Keybot algo for 2020 = +24.3%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +32.9%)