STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long. The financials kicked into bull gear this morning. The algo clicks off a more bullish number moving forward.  UTIL remains below 439 and VIX remains above 29 so these are not bull friendly yet.  The buoyancy in the markets is driven by strong semiconductors and retail, and now helped by financials. Keep watching the XLF 12.60 level for the remainder of the day.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/12/11; 10:01 AM EST = -24; signal line is -50

10/11/11; 9:30 AM EST = -40; signal line is -50

10/10/11; 3:54 PM EST = -24; signal line is -50

10/10/11; 9:30 AM EST = -40; signal line is -50

10/9/11; 7:00 PM EST = -40; signal line is -50

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot remains on the long side and motored along yesterday without printing any numbers after the opening print. The algo is currently scanning several key sectors; utes, semi's, financials and volatility.  UTIL is under 439 favoring bears. If 439 is achieved, the broad markets will run higher.

The semiconductors were the main fuel this week for the markets.  SOX remains elevated, like the retail sector, so these two started the bullish fun and they remain bullish. Financials and volatility will tell the tale on the broad market direction in the days ahead. XLF needs 12.55 to signal the all clear for another leg up in the markets, last print is 12.43, so watch this very closely today. Volatility, VIX, is at 32.86, and it needs to see sub 29 to create further fuel to take the markets higher.

Thus, the key today is UTIL 439, XLF 12.55 and VIX 29. If any of these three attain the levels shown (above 439 for UTIL or 12.55 for XLF; below 29 for VIX), the markets will be running strongly upwards, the SPX will be over 1200 and heading higher. If none of these three levels can be realized today, then the market bears are still in the game pushing back.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/11/11; 9:30 AM EST = -40; signal line is -50

10/10/11; 3:54 PM EST = -24; signal line is -50

10/10/11; 9:30 AM EST = -40; signal line is -50

10/9/11; 7:00 PM EST = -40; signal line is -50

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the algo prints a number at the open. The utilities, UTIL dropped under 439, and, along with the financials remaining weak, and volatility remaining elevated, creating the weakness in the broad markets.

Moving forward today, watch UTIL 439, and also the semiconductors. The quant is watching the SOX 360.60 level currently. SOX is now printing 364.50 so four points above which plays into equity market strength. Markets will move sideways in limbo until either UTIL regains 439, which will drive the indexes higher, or, SOX falls below 360.60, which will drive the indexes lower.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/11/11; 9:30 AM EST = -40; signal line is -50

10/10/11; 3:54 PM EST = -24; signal line is -50

10/10/11; 9:30 AM EST = -40; signal line is -50

10/9/11; 7:00 PM EST = -40; signal line is -50

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long; the bulls came to play today.  The algo is comfortably long now 26 points above the signal line. The utes jumped up and over the UTIL 439 level befoe the closing bell which is market bullish.  The SPX:VIX ratio moved over 35 as well, so everything is going the bull's way.  The market bulls now have three sectors in their camp; utes, semi's and retail.

For the rally to have further legs, UTIL must maintain the 439 level, and the next sector to turn bullish, to further fuel the rally, should be the financials or volatility.  The XLF, now at 12.44, only needs eleven cents, 12.55, and this will turn financials bullish and push the indexes higher. Volatility, VIX, now at 33.02, only needs to drop to 29 to also turn bullish and push the indexes higher. All is not rosie, however, since today was a light volume holiday, and the NYAD closed at +2528, with an intraday print over +2600, which screams for a market reversal and give back day tomorrow.

For tomorrow for the SPX, the market bulls closed the index at the high so the only thing needed is green futures overnight and the indexes will move up after the opening bell again, with the SPX heading up and over 1200.  The market bears have lost control of the markets so their hope is to simply stall the upside move and that can be done by keeping the futures red and taking UTIL back under 439.

In a nutshell, for tomorrow, broad market direction will be dictated by UTIL 439 (currently market bullish at 440), XLF 12.55 (currently market bearish at 12.44) and VIX 29 (currently market bearish at 33).

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/10/11; 3:54 PM EST = -24; signal line is -50

10/10/11; 9:30 AM EST = -40; signal line is -50

10/9/11; 7:00 PM EST = -40; signal line is -50

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the trading week gets under way. The utes, UTIL, have not been able to attain the 439 level in early trading but the semiconductors launched and are now in the bullish camp. The quant is watching UTIL 439, SOX 360.50, RTH 104.50, XLF 12.50 and SPX:VIX 35. Utes, financials and the SPX:VIX ratio remain in the bears favor while semi's and retail are helping the market bulls.

The SPX touched the 1171 level so several more upside handles were in order; the SPX now printing 1180. If UTIL can move above 439 and SPX:VIX above 35 the bullish rally will be verified and the broad markets will have strong upside legs.  If UTIL stays under 439, the SPX:VIX ratio under 35 and the SOX falls back below 360.50, then the market bears will wrestle back control. UTIL is at 437, watch that 439 level closely all this week.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/10/11; 9:30 AM EST = -40; signal line is -50

10/9/11; 7:00 PM EST = -40; signal line is -50

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant idles along on the long side this weekend. The new trading week, however, starts off on an interesting note. The algo number is closing in on the signal line, now only 10 points away so it does not take much for the quant to want to flip back to the short side again.  In fact, looking back from 2 1/2 weeks ago, Keybot flipped short at SPX 1150 on 9/22/11, long at 1148 on 9/26/11, short at 1146 on 9/29/11 and now long at 1146 on 10/6/11. These quant turns highlight the importance of the 1146-1150 S/R cluster, above and market bulls are happy, below and market bears are happy.

The interesting aspect for this week is that the quant will immediately want to flip short the second the opening bell rings tomorrow morning. That is, as long as the utilities, UTIL, stay under 439. With UTIL starting at 431, eight points lower, this looks like a done deal but in trading always expect the unexpected. If a Greece resolution is announced overnight, UTIL may be at 440 before you even pour the morning coffee, but, the likely move is that UTIL will not regain 439 by the early Monday trade.  This 439 level is in play all week long so write it on the desk top in front of you. Market bulls will have a party if the UTIL 439 is achieved. Market bears will have a better party if the utes stay under 439 since this means they have the upper hand. An even more interesting aspect is that the quant will be watching for ute numbers in the 430's for the next 5 weeks! If the utilities cannot meet this requirement, the broad markets will continue to falter.

RTH 103.90 and SOX 359.80 levels are also being watched by the algo. Below these levels and market bears cheer, above and market bulls are running higher. Retail currently favors the bulls while the semi's favor the bears.

For the SPX tomorrow, starting at strong support at 1155, the market bulls must push up to 1171 to regain the upside momo. With the utes in the predicament described above, however, this is unlikely. The market bears have an easier road to hoe. Since the utes look to favor the bears as soon as the markets open, Keybot the Quant will want to go short, but other algo rules will have to be satisfied as well.  If the SPX drops to an 1150 handle, watch carefully, if you see an 1149 flash, that will be a loud and clear signal for the sellers to enter the markets in force, and the indexes will drop several handles in quick order.

If the utes stay under 439, a turn will be imminent, and if the SPX drops under 1150, it is likely that Keybot the Quant will flip short, so even if the posting is delayed here tomorrow, these two criteria will give you something to watch. Both must be satisfied. There is only one pre-scheduled number that the algo clicks off this week and that is on Friday morning.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST = -40; signal line is -50

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH - -LONG -- CAUTION

Keybot the Quant remains bullish thru the weekend. The algo printed two numbers before the close today. Despite the indexes trailing lower for some of the day, the bullish stance was never in question since retail and utilities remain bull-friendly. The semiconductors even joined the bullish fun today when SOX popped above the 359.60 but it gave up the top side move a few minutes later.

High drama continues since any weekend can be Greece's swan song. Although the quant is long now, an interesting development should occur on Monday's open, and a high potential that the algo reverses. This will be discussed as the weekend continues.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 3:40 PM EST = -40; signal line is -51

10/7/11; 3:22 PM EST = -28

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the pre-scheduled number prints for this morning. Utes and retail pushed the markets higher over the last three days. UTIL is at 430 now six points above the critical 424 for today so that should hold for now.  RTH is now at 104.59, above its critical level of 103.75. Market bulls will remain happy if this holds, if RTH loses 103.75, the markets will be weakening. The jobs report data was well received by the futures markets over the last few minutes, thus a strong green start appears on tap for the indexes.

For the market bulls to show they have further game, they now need cooperation by the semiconductors. Watch the socks, SOX, now at 355.17. If the market launch this morning puts the SOX above 359.50, then the market bulls got game. If the markets pop at the open but the SOX cannot achieve 359.50, then the market pop would be suspect and the upside would be limited.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST = -40; signal line is -52

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

STOCK MARKET BULLISH -- LONG

The quant is on the long side now. Retail and utilties boosted the broad markets today.  Market bulls have to keep these two sectors elevated and now try to boost the semi's and financials further if they want to keep the recovery rally going. Market bears need to keep semi's and financials on the weak side and push utes and retail lower to regain control of the indexes.  UTIL 424 remains a key level and the bulls spiked it to 430 today.

The algo prints a pre-scheduled number at 9 AM tomorrow so the roadmap can be finalized at that time. UTIL, RTH, SOX and XLF (utes, retail, semi's and financials, respectively), will require close attention; the quant is focused on these four currently.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

10/6/11; 10:20 AM EST = -56

10/6/11; 9:48 AM EST = -72

10/6/11; 9:35 AM EST = -56

SPX Daily Chart Showing Keybot the Quant Algorithm Turns

Updated chart showing the algo turns. Last trade was a round trip going short from SPX 1146 on 9/29/11 and today now flipping back to the long side at SPX 1146.

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flipped to the long side at 10:21 AM EST at SPX 1146. Stay alert for a whipsaw either today or tomorrow. UTIL is comfortably above 424 now and RTH is maintaining above the 103.68 level with a 104 handle. Initeresting that the quant entered and exited the last trade at the same level, SPX 1146.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/6/11; 10:21 AM EST = -40; signal line is -53; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+0.0%; Keybot for 2011=+23.9%)(Actual this trade via DOG=+0.3%; Actual for 2011=+35.5%)

10/6/11; 10:20 AM EST = -56

10/6/11; 9:48 AM EST = -72

10/6/11; 9:35 AM EST = -56

10/5/11; 10:35 AM EST = -72

10/5/11; 9:54 AM EST = -88

10/4/11; 3:43 PM EST = -72

10/4/11; 9:39 AM EST = -88

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short thru the continuing high drama.  UTIL popped above 424 after the open indicating that the market bulls were gathering strength, then, pooped out, falling back under 424.  RTH came up to look at 103.50 again and failed. SPX did not reach 1146, so far. Continue to watch UTIL 424 and RTH 103.56 (the quant is constantly adjusting this value a few pennies one way or the other). Current last prints are UTIL 423.56 and RTH 103.46. High drama.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/6/11; 9:48 AM EST = -72

10/6/11; 9:35 AM EST = -56

10/5/11; 10:35 AM EST = -72

10/5/11; 9:54 AM EST = -88

10/4/11; 3:43 PM EST = -72

10/4/11; 9:39 AM EST = -88

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains bearish to start the Thursday session. Two key sectors, retail and utilities, will dictate broad market direction.  If RTH, now at 103.32 moves above 103.50, this is a big plus for the market bulls; retail will lift the broad markets. If RTH stays below 103.50, however, this keeps the market upside in check.

For utilities, UTIL, continue to watch 424 and 418 (417.88). If UTIL moves above 424, the recovery rally will be building a head of steam and the markets will move upwards. If the RTH is above 103.50 then the recovery rally will be in full mode. If UTIL remains between 417.88 and 424, then the markets move sideways to sideways down. If UTIL drops under 417.88, the broad markets will drop significantly.

Note how the algo rode the down side the last few days but remained short the whole time, now only to see the SPX come all the way back up to the entry price. The quant is simply meandering a path thru this high-volatility up-huge and down-huge price action recently. Watch SPX 1146 since if the market bulls push two points higher at the open to move up and over then the upside has strong potential. Otherwise, the bull-bear wrestling match continues.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/5/11; 10:35 AM EST = -72

10/5/11; 9:54 AM EST = -88

10/4/11; 3:43 PM EST = -72

10/4/11; 9:39 AM EST = -88

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short with the algo clicking off a couple numbers this morning. The utilities, UTIL, lost the critical 417.80 level early in the session but then managed to regain the level to stop a large market selling event, at least for now.  Keep watching UTIL 417.80.  Last print is 418.92, a point above.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/5/11; 10:35 AM EST = -72

10/5/11; 9:54 AM EST = -88

10/4/11; 3:43 PM EST = -72

10/4/11; 9:39 AM EST = -88

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. The utilities recovered into the close like everything else.  UTIL at 422, remains two points below the critical 424 level, but comfortably four points above 418. Thus, the markets avoided a huge selling event which will be signaled again should UTIL lose 418. But the market bulls did not boost UTIL above 424 to initiate a recovery rally.  Expect the indexes to remain weak and trail sideways to sideways lower if UTIL remains between 418 and 424.

For the SPX, the market bulls have some momo. If the bulls can keep the futures green all night long, and get up over 1125 after the open, the upside will accelerate with a move towards 1131 and more than likely UTIL will be above 424 to verify the bullishness. If the futures are red indicating a lower open, the market bears have a formidable task ahead to get down to 1075 to start a market slide.  A move thru 1076-1124 is sideways action with no resolution.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/4/11; 3:43 PM EST = -72

10/4/11; 9:39 AM EST = -88

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant is riding the short side down. The utilities failed at 9:39 AM, the 418 level gave way after the bell and locked in the negative signal after a few minutes time. A big drop in the equities markets is now anticipated in the minutes ahead.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/4/11; 9:39 AM EST = -88

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short, idling along calmly all day long until the final couple minutes, kicking off a number just before the bell. UTIL 424 is very important this week and it failed in the final minute. This casts additional bearishness on the indexes but the early action tomorrow will supply confirmation, or not. Many algo's have the 15-week utility lookback technique programmed, Keybot does, so this was high drama all afternoon.  Reference Keybot's sister site, The Keystone Speculator, to read the real-time references for UTIL as the afternoon played out.

If you remember back during the August action, we spent a few days watching the UTIL 50 week MA cross, do you remember? The UTIL 50 week MA represents a trap door for the broad markets. This value is 417.91, call it 418 so it is easy to remember.  Thus, for tomorrow (Tuesday), the utes will dictate the broad market direction. If UTIL moves back above 424, the market bulls will be back in the markets buying and the indexes will float back up.  If UTIL remains between 424 and 418, the market selling will continue in an orderly fashion, the indexes will trail off lower.  If UTIL loses 418, the markets will go into free fall.

That said, the internals for the markets; CPC, NYAD, NYHL and TRIN are all agreeable to a market bounce. The beat up financials are also ready for a recovery rally now so stay cautious from getting overly bearish on the indexes at this juncture. Use UTIL 424 and 418 as a guide. For now, the algo remains firmly bearish but stay vigilant for a flush and potential bottom coming tomorrow, or soon.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/3/11; 3:59 PM EST = -72

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant starts the new week on the short side but with these erratic markets, continue to expect the unexpected. The utes are the only bullish sector as measured by the algo, and for the entire week ahead, the quant is using UTIL 424 as a line in the sand that determines market bullishness versus bearishness. If UTIL, now at 433, comfortably nine points above, falls under 424, the broad markets will be in a strong sell off mode. If the 424 level is maintained all week long, the bulls will keep the indexes buoyant.

Retail is the sector on the front lines pushing the markets on each side of the bull-bear street each day.  RTH topped and dropped intraday at 3 PM Friday and the markets tumbled into the close. If RTH, now at 102.39, stays under 103.60, the market bears are having fun, if RTH moves above 103.60 the market bulls are regaining control.

For the SPX, the market bears only need to see red futures, since the Friday close was at the lows, and that will be enough to explore lower levels. If 1131 fails, the 1119-1121 cluster is likely on tap. The market bulls need to touch an 1160 handle to undo Friday's damage and regain control, a formidable task. Monday's broad market direction will be dictated by the behavior of RTH and UTIL as described above.

10/31/11; 7:00 PM EST EOM =

10/30/11; 7:00 PM EST =

10/28/11; 10:00 AM EST =

10/25/11; 10:00 AM EST =

10/23/11; 7:00 PM EST =

10/19/11; 9:00 AM EST =

10/16/11; 7:00 PM EST =

10/14/11; 10:00 AM EST =

10/9/11; 7:00 PM EST =

10/7/11; 9:00 AM EST =

10/2/11; 7:00 PM EST EOM EOQ3 = -56; signal line is -42

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is bearish thru the weekend. The weakness in retail continued thru the end of Friday's session and that caused the weakness in the indexes. The algo did not click off any additional numbers in the afternoon. Then, when the SPX 1139 handle was touched, the markets started to unravel and the indexes tumbled into the close.  The support/resistance at SPX 1142 is very important with the bulls and bears fighting over that level since Thursday afternoon. 1142 will play a key role moving forward.

The utes are the only bull-friendly sector remaining, thus, they will play a key role next week, utilities along with retail. After tomorrow's Sunday print number for the algo, we will take a look at the exact levels for Monday. UTIL 424 level appears to be key for all next week.

10/9/11; 7:00 PM EST =

10/7/11; 10:00 AM EST =

10/2/11; 7:00 PM EST EOM EOQ3 =

9/30/11; 12:11 PM EST = -56; signal line is -42

9/30/11; 11:30 AM EST = -40; signal line is -42 but algorithm says stay short

9/30/11; 10:00 AM EST = -56; signal line is -43

9/30/11; 9:30 AM EST = -56; signal line is -43

9/29/11; 2:10 PM EST = -56; signal line is -45; go short 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=-0.2%; Keybot for 2011=+23.9%)(Actual this trade via DIA=+1.1%; Actual for 2011=+35.2%)