Keybot the quant flips to the long side on Friday morning at SPX 5612. The bulls retake the stock market market baton and run ahead with the algo number 13 points above the signal line. That is not saying much. The stock market is all over the map including sectors, indexes and individual tickers so do not be surprised if the robot whipsaws back to the short side. Goin' up, goin' down, goin' up, down, down, up, anyway you want it, let it roll, like Jimmy sings.
The banks started falling over the edge last hump day but a stick save occurred. This steadied stocks and then retail stocks were pumped hard giving the broad stock market a big push higher. Scamazon was up +9% last week. Interestingly, despite the upside orgy in stocks, pumped by retail stocks, banks and copper, the rally occurs without the chips or volatility. Extremely odd.
The quant is tracking four metrics that are controlling stock market direction currently. Financials and copper are in the bull camp creating the upside orgy. Semiconductors and volatility are in the bear camp asking why everyone is so happy?
To continue the stock market rally and print new record highs for the SPX above 5670, bulls need chips and volatility. Bulls need SOX above 5022 and VIX below 14.95. Any one of the two will send the SPX to its record high and both turning bullish will guarantee new all-time highs.
It is odd that the VIX remains in the bear camp despite the comeback rally. If VIX remains above 14.95, the rally is meaningless and will wither on the vine and fade, like past loves. For the big rally last week, and if you are bullish, you are worried that the VIX remains elevated and semi's have not fully recovered. The SOX only needs +0.8% more to turn bullish and provide fuel to the broad market so watch some chip names in the pre-market since they will tell you where SOX is headed.
The bears need weaker financials and copper. Bears need XLF below 43.52 and CPER below 26.32. Any one of the two will immediately stop the stock market rally and both will begin a more sustainable downside path for stocks.
CPER closed on Thursday exactly at the 26.32 the robot called out ahead of time. Copper continued its buoyancy on Friday providing the push higher for stocks. CPER ends the week at 26.40 only a whisker from the bear camp at 26.32. Watch copper futures overnight into Monday morning to see if they drop more than -0.3%, if so, stocks will be soggy with a downward bias. If copper futures are flat or higher, the bulls are coming to play again on Monday.
It's a coin-flip now for the stock market. The circus continues with Pope Powell riding in on his pale green horse on Wednesday to announce the big 25-bip, or maybe 50-bip, rate cut.
The caution flag is out since markets can change on a dime. If CPER loses 26.32, only a hair away, consider the imminent turn to be in play, and then if the SPX drops below 5602 trending lower, Keybot the Quant will likely whipsaw back to the short side.
Semi's, volatility, copper and banks are all that matter currently with copper at the top of the heap. Focus on these four and you will know where stocks are headed.
On the last trade, that ran for 10 days, the quant program loses a percent and the actual trading loses a couple percent. Whipsaw price action wreaks havoc on robots. For the year, the benchmark S&P 500, that is the US stock market, is up almost +18%. The bulls are puffing their chests calling for the SPX to print over 6K this year. The Keybot the Quant program is up +5% this year and the actual trading generated by the quant is up +9% underperforming the benchmark by 9 percentage points. Keybot exited SDS and entered SSO.
9/15/24;
7:00 PM EST =
9/13/24;
2:28 PM EST = +18; signal line is +5
9/13/24;
2:06 PM EST = +2; signal line is +5 but algorithm remains long
9/13/24;
10:00 AM EST = +18; signal line is +5
9/13/24; 9:36 AM EST = +18; signal line is +5; go long 5612;
(Benchmark SPX for 2024 = +17.7%)(Keybot algo this trade = -1.2%; Keybot algo
for 2024 = +5.0%)(Actual results this trade = -2.1%; Actual results for 2024 =
+9.3%)
9/11/24;
12:36 PM EST = +2; signal line is +4
9/11/24;
10:46 AM EST = -14; signal line is +5
9/11/24;
10:43 AM EST = +2; signal line is +7
9/11/24;
10:27 AM EST = -14; signal line is +7
9/9/24;
10:21 AM EST = +2; signal line is +9
9/8/24;
7:00 PM EST = -14; signal line is +9
9/6/24;
9:36 AM EST = -14; signal line is +11
9/6/24;
9:00 AM EST = +2; signal line is +11
9/5/24;
12:40 PM EST = +2; signal line is +12
9/5/24;
12:20 PM EST = -14; signal line is +12
9/3/24; 2:04 PM EST = +2; signal line
is +13; go short 5544; (Benchmark SPX for 2024 = +16.2%)(Keybot algo
this trade = +0.4%; Keybot algo for 2024 = +6.2%)(Actual results this trade = +0.6%;
Actual results for 2024 = +11.4%)
