Monday, January 18, 2021


Keybot the Quant remains long. Happy MLK Day. Trading resumes in the States tomorrow. The bulls are in charge of stock market direction with the algo number 5 points above the signal line. Volatility spiked on Friday morning so it looked like the bulls were finally cooked, but the Federal Reserve jumped on Uncle Vix, wrestling him to the ground, so stocks could remain buoyant.

The VIX is at 24.34 in the bull camp. Bears need the VIX above 25 22 to create market mayhem. Bears will also benefit from weaker copper. Bears need CPER below 21.45 which represents about a -3% drop in copper futures. That will create stock market weakness.

Utes are key. UTIL 875.81 is the key bull/bear line in the sand this week. UTIL begins at 851 which is an immediate failure out of the gate which will usher in stock market weakness. If UTIL remains below 876 after the opening bell, and the SPX drops below 3750 heading lower, Keybot the Quant will likely flip short, hence the imminent turn notation is in the title line. The bulls need UTIL above 876 as fast as possible and the stock market party can begin again.

If utes rally, that will hint that the bears probably do not have a lot of strength and it may be enough to at least keep the stock market chopping sideways. The wheels will fall off if the VIX pops above 25.22. If UTIL falls through 825, the stock market may go into free fall.

That's a bunch of confusing stuff. Simplifying, bulls need UTIL above 876 pronto otherwise they are in trouble. Bears need to keep UTIL below 876 and push SPX below 3750 which should trigger the robot to flip short. If VIX pops above 25.22, you know the market is in serious trouble and stocks will be falling like rocks. If CPER then fails, stocks may assume a crash profile and then the story will be written by UTIL 825.

If UTIL 876, VIX 25.22 and CPER 21.45 occur in quick order, turning the market extremely bearish, the quant would likely flip short immediately. Is that clear as mud?

The opening minutes tomorrow are important. Watch the utilities and volatility; they dictate stock market direction and whether the model flips short on Tuesday, or not. Keybot prints one pre-scheduled number this week on Thursday morning. Is it time for a market heartache?

1/24/21; 7:00 PM EST =
1/21/21; 9:00 AM EST =
1/17/21; 7:00 PM EST = +67; signal line is +62
1/15/21; 10:00 AM EST = +67; signal line is +62
1/12/21; 1:17 PM EST = +67; signal line is +61

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