Tuesday, January 5, 2021


Keybot the Quant remains short as the first day of trading in 2021 results in a down day. The SPX actually prints a new all-time record high at 3769.99 but the all-time closing high remains at 3756.07 from 12/31/20. The quant prints three numbers on Monday and the bears remain in control of stock market direction with the algo number 14 points below the signal line. The caution flag remains out but if the algo number drops further, the caution may be removed from the title line.

Volatility and retail stocks fail yesterday creating the broad stock market weakness. The VIX pops above the key bull/bear line in the sand at 25.37. The VIX is trading now at 26.54. Bears are fine as long as the VIX remains above 25.37. If the VIX drops below 25.37, the bulls will be pushing stocks higher. If there is a rally in stocks, but the VIX does not drop below 25.37, the rally is phony, and stocks will roll back over and die.

RTH failed at the key bull/bear line in the sand at 155.25 but then recovered after munch time Monday to end at 156.43 back in the bull camp. Thus, RTH tells the story today. Bears win, and stocks will crumble, if RTH fails at 155.25. The bulls must keep RTH elevated while at the same time push vol lower.

Note the drop in utes which signals potential serious trouble for the stock market ahead. A couple weeks will have to play out to see if there will be long-term damage. UTIL is at 843 coming down to potentially test the key bull/bear line in the sand at 827. There will be Hell to pay if 827 fails. Next week, 832.49 is key. Thus, by Friday at 4 PM EST, UTIL needs to be above 832 which is only 11 points below the current price. Keep an eye on it. Bears would also receive more downside juice if copper futures fall about -3%. Copper is rallying +1.2% this morning so the bears will need about a -4.2% drop intraday in copper from current levels to create stock market mayhem.

Bears need weaker RTH, UTIL and CPER to pave the way lower for equities. Bulls need a lower VIX to stop and prevent any selling in the stock market.

1/8/21; 9:00 AM EST =
1/4/21; 1:16 PM EST = +53; signal line is +67
1/4/21; 11:56 AM EST = +37; signal line is +68
1/4/21; 10:51 AM EST = +53; signal line is +68
1/1/21; Begin 2021 Data Set = +67; signal line is +69; go short 3756; (Benchmark SPX for 2021 = 0%)(Keybot algo this trade = 0%; Keybot algo for 2021 = 0%)(Actual trading results this trade = 0%; Actual trading results for 2021 = 0%)

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