STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side yesterday at SPX 3421 during the market hiccup. As always, remain vigilant for a potential whipsaw move today. Commodities and banks create the stock market softness but the late session rally brought the banks back from the dead. Bulls need lower volatility and stronger commodities. Bears need weaker banks, chips and retail stocks.

Bulls need VIX below 27.01 or they got nothing. Bulls also need GTX above 1730 and XLF above 24.68. XLF closes yesterday exactly on top of the 24.68 identified by the quant. As banks go, so goes the markets. Bulls will celebrate if XLF moves above 24.68 heading higher but bears will be happy and stocks will remain weak, and deteriorate, if XLF drops below 24.68 moving lower.  

Bears also need RTH below 149.22 and SOX below 2263 which would create market carnage. Yesterday, RTH came down to kiss the bull-bear line in the sand but price recovered allowing the late-day rally.

XLF dictates stock market direction, if it moves higher, watch VIX to see if it can extend the rally. If XLF moves lower, watch RTH and SOX for potential failures which would usher in serious stock market negativity.

On the last trade, that ran for 3 weeks, the Keybot program gains +0.7% and the actual trading generated by Keybot gains +1.4%. Keybot exits QQQ and enters SDS flipping back into the 2x leveraged ETF's since it has been over a month since the whipsaw. The stock market may be moving out of its choppy pattern. For the year thus far, the benchmark S&P 500 is up about +6%, the Keybot the Quant program is up +22% and the actual trading is up +43%. Watch the banks. Keybot prints a pre-scheduled number this morning.

11/1/20; 7:00 PM EST EOM =
10/30/20; 10:00 AM EST =
10/27/20; 10:00 AM EST =
10/26/20; 10:50 AM EST = +29; signal line is +56
10/26/20; 10:32 AM EST = +45; signal line is +57; go short 3421; (Benchmark SPX for 2020 = +5.9%)(Keybot algo this trade = +0.7%; Keybot algo for 2020 = +22.2%)(Actual trading results this trade = +1.4%; Actual trading results for 2020 = +42.6%)
10/26/20; 9:45 AM EST = +45; signal line is +56 but algorithm remains long
10/25/20; 7:00 PM EST = +59; signal line is +55
10/20/20; 9:00 AM EST = +59; signal line is +55
10/18/20; 7:00 PM EST = +59; signal line is +54
10/16/20; 4:10 PM EST = +59; signal line is +53
10/16/20; 10:00 AM EST = +73; signal line is +52
10/16/20; 7:25 AM EST = +73; signal line is +50
10/16/20; 6:54 AM EST = +59; signal line is +48
10/16/20; 6:46 AM EST = +73; signal line is +48
10/16/20; 3:06 AM EST = +59; signal line is +46
10/15/20; 3:25 PM EST = +73; signal line is +45
10/15/20; 4:30 AM EST = +59; signal line is +43
10/11/20; 7:00 PM EST = +73; signal line is +40
10/8/20; 1:55 PM EST = +73; signal line is +38
10/8/20; 9:18 AM EST = +59; signal line is +35
10/8/20; 9:08 AM EST = +73; signal line is +33
10/7/20; 9:36 AM EST = +59; signal line is +30
10/6/20; 2:16 PM EST = +43; signal line is +30
10/6/20; 1:32 PM EST = +59; signal line is +30
10/6/20; 12:50 PM EST = +43; signal line is +29
10/6/20; 12:42 PM EST = +59; signal line is +29
10/6/20; 11:09 AM EST = +43; signal line is +27
10/6/20; 10:42 AM EST = +59; signal line is +27
10/6/20; 9:36 AM EST = +43; signal line is +26
10/5/20; 2:59 PM EST = +29; signal line is +25; go long 3399; (Benchmark SPX for 2020 = +5.2%)(Keybot algo this trade = -2.0%; Keybot algo for 2020 = +21.5%)(Actual trading results this trade = -1.0%; Actual trading results for 2020 = +41.2%)