STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short to start the week.  There are no pre-scheduled numbers this week so the algorithm will simply scan along, subject to the data and news flow.  The euro mess comes to a head this week, there is an FOMC decision and press conference, and China should raise rates any time.  This is a highly volatile atmosphere now and the rise in the VIX is starting to reflect the elevated anxiety.

Housing and technology sectors are key this week. Watch the utilities, UTIL, this week; if the 418 handle is lost, now at 426, the weakness in the broad markets will accelerate substantially. The euro news, happy or sad, will dominate the equities markets.

For the SPX for tomorrow, if the market bulls can touch the 1280 handle, about six points higher, the buying will accelerate and a short countertrend rally will be in full swing, with the SPX moving up a few additional handles towards 1282 and 1286. If the market bears come to play, however, and push the SPX under 1267.40, the selling will accelerate downwards towards 1262 in quick order, and then, depending on whether or not this support breaks, a push to test the starting year number 1257.64 may be in order. A move between 1268 and 1279 during the Monday session represents sideways slop, and continued indecision and instability in the markets.

Wednesday this week is a pivotal day. Seasonality-wise, this week is down 18 of the last 20 times, so keep this in mind as the week moves along.

7/3/11; 7:00 PM EST =

7/1/11; 10:00 AM EST =

6/30/11; 7:00 PM EST EOM =

6/28/11; 10:00 AM EST =

6/26/11; 7:00 PM EST =

6/19/11; 7:00 PM EST = -42; signal line is -28

6/17/11; 12:17 AM EST = -42

6/17/11; 11:12 AM EST = -28; signal line is -27

6/17/11; 11:02 AM EST = -42

6/17/11; 10:47 AM EST = -28; signal line is -26

6/17/11; 10:23 AM EST = -42

6/17/11; 10:00 AM EST = -28; signal line is -25

6/17/11; 9:32 AM EST = -28

6/16/11; 9:00 AM EST = -42

6/15/11; 11:38 AM EST = -42

6/15/11; 11:31 AM EST = -28

6/15/11; 11:20 AM EST = -12; signal line is -23 but algorithm says stay short

6/14/11; 9:30 AM EST = -28; signal line is -24

6/13/11; 3:35 PM EST = -42

6/13/11; 1:59 PM EST = -28; signal line is -23

6/13/11; 11:51 AM EST = -42

6/12/11; 7:00 PM EST = -28

6/10/11; 1:54 PM EST = -28; signal line is -21

6/10/11; 1:45 PM EST = -42

6/10/11; 10:06 AM EST = -28; signal line is -18; go short 1277; (Benchmark SPX for 2011=+1.5%)(Keybot this trade=-1.0%; Keybot for 2011=+5.4%)(Actual this trade via DIA=-1.1%; Actual for 2011=-0.1%)