Sunday, February 28, 2021


Keybot the Quant remains short as the utilities trap door opens and a big sucking sound is heard. Hopefully, yinz had your helmets on. The stock market works itself into frenzy, it builds, it builds, and then the crescendo. The bears are in charge of the stock market direction with the algo number 33 points below the signal line. February ends and March begins.

The failure in the utilities is serious business. It tells you whether the pullback in stocks, that should begin anytime now, has long-lasting legs, or not. The failure of UTIL at the 829-ish level is a huge stake through the heart of the US stock market and forecasts major downside in the weeks and months forward. Bulls need utes to recover pronto.

The bulls and bears have drawn the lines in the sand for the war ahead. The bears take stocks lower with weaker retail stocks (think AMZN), weaker utilities and higher volatility is their general. The bulls are trying to stop the carnage with stronger chips, stronger banks and stronger copper is their general.

Bears need SOX below 2985 and the stock market takes another leg lower. Bears need XLF below 30.50 and that will cause a selloff in equities. Bears need CPER below 23.00 to cause market mayhem. SOX is at 3068 so focus on that as a key market signal for Monday. Chips in general will dictate the path forward. If semiconductors are weak pre-market, bears are going to slash. Bulls will be happy if they see buoyant semi's.

Bulls need VIX below 24.20 to signal a stop to the stock market selling. Bulls need RTH above 159 and UTIL above 821. Bulls likely need at least 2 of the 3 parameters to flip the stock market long. 

It appears to be a game of chips versus volatility; bears need to stab semi's in the belly while bulls need to tackle Uncle Vix and keep him down with their jackboots on his throat.

Now we see what the bears got. Keybot prints one pre-scheduled number this week on Friday morning.

3/7/21; 7:00 PM EST =
3/5/21; 9:00 AM EST =
2/28/21; 7:00 PM EST EOM = +18; signal line is +51
2/26/21; 10:00 AM EST = +18; signal line is +52
2/25/21; 11:52 AM EST = +18; signal line is +53
2/25/21; 11:43 AM EST = +32; signal line is +54
2/24/21; 10:21 AM EST = +48; signal line is +53

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