Thursday, August 27, 2020


Keybot the Quant remains long during another sleepy week. Stocks continue growing to the sky with traders at fever pitch. The bullish euphoria leads into Federal Reserve Chairman Powell's speech today at the virtual Jackson Hole Symposium. Powell will dictate the path of markets ahead. The central bankers are the market. 

The bulls remain in charge of stock market direction currently but the pre-scheduled number prints and narrows the bull call to only 2 measly points. Bulls need stronger utilities. UTIL is slip-sliding away now below 800. Bulls need UTIL above 834 for stocks to remain elevated and moving higher into year-end. Right now, utes are hinting that the opposite will happen. Bulls also need banks to remain strong.

Bears need weaker banks which is the top stock market parameter most impacting direction. Bears need XLF below 24.20 (now at 24.84) so this is a drop of over -2%. Remember, the model was focused on banks on Monday to begin the week, and then the bulls goosed the banks higher to keep equities elevated into the Powell main event today.

Bulls need UTIL above 834 which is a formidable task. Bears need XLF below 24.20 which is doable and will depend on what Pope Powell says. The closeness of the algo number and signal line tell you that the stock market is a toss-up. If XLF loses 24.20, consider the imminent turn to the short side to be in play immediately, and if the SPX then falls below 3444, it is likely that Keybot the Quant will flip short.

Keybot prints a pre-scheduled number tomorrow morning shortly after the opening bell. Today may be a watershed day for the stock market. Powell has promised easy money forever so he had better keep shelling out that fiat gold that makes the wealthy filthy rich. The expectation is for a dovish Fed statement so any hesitance on Powell's part to not print money will create headaches for stocks.

8/30/20; 7:00 PM EST =
8/28/20; 10:00 AM EST =
8/25/20; 10:00 AM EST = +50; signal line is +48
8/23/20; 7:00 PM EST = +53; signal line is +47

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