Keybot the Quant flips to the long side yesterday before munch time at SPX 5520. The relief rally off the bottom turns out to be a face-ripper. Generally, the US stock market collapsed -10% off the all-time record highs last month only to recover +8% in a heartbeat. The robots are triggering off each data point. The bulls are in control with the algo number 30 points above the signal line.
Financials led the way higher as you saw with XLF. Yesterday, retail sales hit the ball out of the park and the WMT earnings release promises a big Q4 (even though the numbers are based on prices rising in an inflationary environment while the actual 'unit' sales decrease; in addition, the top 20% of Americans on the wealth and career scale account for nearly one-half (50%) of the retail sales; isn't crony capitalism sickening?). The chips join the party sending US stocks to the moon. XLF, RTH and SOX are the heroes for the bulls.
The quant targets volatility as the next hurdle. Write VIX 14.83 on a sticky note and put it on your forehead. Stocks will lock-in a bigtime up move, probably towards the record highs, if the VIX drops below 14.83. Right now, real-time, the VIX is trading at 15.44 so bulls need another 61 pennies of downside. If the bulls are unable to push the VIX below 14.83 (yesterday they tried but failed; another test is likely on tap today), the bulls got buptkis, and stocks will reverse and become soggy again.
The bears need to reverse the bullish mojo by sending SOX below 5095, RTH below 203.21 and/or XLF below 42.15. The banks have exploded higher so it may take a few days for XLF to turn negative. Bears need either SOX or RTH to turn bearish to stop the upside rally in the stock market.
Thus, stocks will continue higher with bulls throwing confetti if the VIX drops below 14.83. Conversely, the stock market rally will end if SOX falls below 5095 and/or RTH below 203.21. If both turn negative, Keybot the Quant will likely be in position to flip back to the short side.
On the last trade, that ran for a month, the quant program gains a couple percent and the actual trading gains +3%. It is a shame that the relief rally is a vertical rocket ride since that takes away much of the downside gains. Nonetheless, for the year thus far, the benchmark S&P 500 is up +16%, the Keybot the Quant program is up +6%, and the actual trading generated by the quant is up +11%. The actual trading is finally gaining on the benchmark now only underperforming by 5 percentage points. Keybot exited SDS and entered SSO remaining in the 2x leveraged ETF's.
Watch the VIX 14.83 bull/bear line in the sand; it is all that matters right now in real-time. VIX is at 15.43 having breakfast in the bear camp. Keybot the Quant prints a couple of pre-scheduled numbers over the next couple hours.
8/18/24;
7:00 PM EST =
8/16/24;
10:00 AM EST =
8/16/24;
9:00 AM EST =
8/15/24; 10:37 AM EST = +17; signal line is -13; go long 5520;
(Benchmark SPX for 2024 = +15.7%)(Keybot algo this trade = +1.7%; Keybot algo
for 2024 = +5.8%)(Actual results this trade = +3.3%; Actual results for 2024 =
+10.8%)
8/15/24;
9:42 AM EST = +17; signal line
is -14 but algorithm remains short
8/2/24;
3:32 PM EST = -15; signal line
is +0
8/2/24;
1:55 PM EST = -31; signal line
is +1
8/2/24;
11:41 AM EST = -15; signal line
is +4
8/2/24;
11:14 AM EST = -31; signal line
is +5
8/2/24;
9:00 AM EST = -15; signal line
is +7
8/1/24;
3:31 PM EST = -15; signal line
is +8
7/31/24;
7:00 PM EST EOM = +1; signal
line is +10
7/30/24;
10:00 AM EST = +1; signal line
is +10
7/29/24;
11:45 AM EST = +1; signal line is +11
7/29/24;
9:36 AM EST = -15; signal line
is +12
7/28/24;
7:00 PM EST = +1; signal line is
+13
7/26/24;
10:41 AM EST = +1; signal line
is +14
7/18/24; 3:39 PM EST = +17; signal line is
+31
7/18/24; 2:45 PM EST = +1; signal line is +31
7/18/24; 2:10 PM EST = +17; signal line is
+33
7/18/24; 1:52 PM EST = +31; signal line is
+34
7/18/24; 12:37 PM EST = +17; signal line is
+35
7/18/24; 11:15 AM EST = +1; signal line is
+36
7/18/24; 9:36
AM EST = +17; signal line is +37
7/17/24; 2:26 PM EST = +31; signal line is
+38
7/17/24; 2:11 PM EST = +17; signal line is
+38
7/17/24; 12:38 PM EST = +31; signal line is
+39
7/17/24; 12:13 PM EST = +17; signal line is
+39
7/17/24; 12:02 PM EST = +31; signal line is
+40
7/17/24; 10:11 AM EST = +17; signal line is
+40
7/17/24; 9:53 AM EST = +31; signal line is
+41
7/17/24; 9:30 AM EST = +17; signal
line is +41; go short 5615; (Benchmark SPX for 2024 = +17.7%)(Keybot
algo this trade = +5.2%; Keybot algo for 2024 = +4.1%)(Actual results this
trade = +5.0%; Actual results for 2024 = +7.5%)
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