STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short to start the new week of trading. Futures are up at this writing on happy debt ceiling talk. For the SPX for Monday, the market bulls need to get up and over 1304, if so, that will trigger upside acceleration to test 1307, 1312, perhaps 1314. If the bulls cannot attain 1304+ tomorrow, then the day should have a sideways texture to it, SPX moving thru 1283-1303. Should the debt ceiling talk grow sour overnight, the market bears need to lose the 1283 handle during the Monday session. As soon as a 1282 handle would print, the sellers will move in to the markets in force, driving the indexes much lower in short order, creating fear.

For now, Sunday evening, the bulls are favored for Monday and that 1304+ number is key; this 1304+ level will decide the outcome between an upwards acceleration day versus an up and flatish day.  The algorithm prints out a pre-scheduled number on Friday morning. Monday's session should be active. Markets remain unstable and at the mercy of the news wires.

8/21/11; 7:00 PM EST =

8/16/11; 9:00 AM EST =

8/14/11; 7:00 PM EST =

8/12/11; 10:00 AM EST =

8/7/11; 7:00 PM EST =

8/5/11; 9:00 AM EST =

7/31/11; 7:00 PM EST EOM = -26; signal line is +9

7/29/11; 10:00 AM EST = -26

7/28/11; 3:21 PM EST = -26

STOCK MARKET BEARISH -- SHORT

Keybot remains short as the markets languish. The pre-scheduled number results in no change.  The high 1280's have held so far so this may prove to be a short-lived selling frenzy for the broad markets.  Utes dropping today, UTIL now at 431, but comfortably above the danger zone of 412-416, remaining bullish.  Copper remaining buoyant as well. 1286-1289 very important support here.

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

7/29/11; 10:00 AM EST = -26

7/28/11; 3:21 PM EST = -26

7/28/11; 3:17 PM EST = -10

7/28/11; 10:05 AM EST = +4; signal line is +17

7/28/11; 9:30 AM EST = -10

7/27/11; 3:46 PM EST = -26

7/27/11; 2:27 PM EST = -12

7/26/11; 10:00 AM EST = +4; signal line is +24

7/25/11; 9:30 AM EST = +4; signal line is +24

STOCK MARKET BEARISH -- SHORT

Keybot motors along on the short side. Two numbers printed during the last hour of trading, after which the markets tumbled into the close.  All day went by but the bears finally pushed the SPX under 1303.50 to get the ball rolling downhill into the close.

The algorithm is comfortably short now but as seen today, things can change fast.  A debt ceiling agreement can potentially launch the markets skyward. Utilities and copper are the only bullish sectors trying to stop the bleeding in the broad markets.

The SPX closed at 1301.  For the Friday session, if the bulls can pull together 15 points and move above 1316, this is enough to convince the buyers to come in force, the indexes will accelerate higher.  All the market bears have to do is push the SPX a point and a half lower to touch a 1298 handle; that is the all clear signal for the bears to stab downward.  The 1297 gap will be filled and the SPX will drop in short order to test 1295, 1292 and perhaps 1289.  1289 is also the current 10 month MA; key support.  Sideways action is reflected by the 1299-1315 range. 

A pre-scheduled number clicks off at 10 AM. Markets remain unstable and also under the erratic affects of the Bradley major turn window.Stay on guard.

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

7/29/11; 10:00 AM EST =

7/28/11; 3:21 PM EST = -26

7/28/11; 3:17 PM EST = -10

7/28/11; 10:05 AM EST = +4; signal line is +17

7/28/11; 9:30 AM EST = -10

7/27/11; 3:46 PM EST = -26

7/27/11; 2:27 PM EST = -12

7/26/11; 10:00 AM EST = +4; signal line is +24

7/25/11; 9:30 AM EST = +4; signal line is +24

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short after printing two numbers this morning.  Retail rejoined the bull camp at the opening bell which provides market buoyancy. The NYA is back above the 40 week MA showing that the secular bulls have the upper hand again.  The bears could not, as yet today, push under 1303.50, so the bulls are running with the ball instead. Caution is warranted since the algorithm number is approaching the signal line again.

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

7/29/11; 10:00 AM EST =

7/28/11; 10:05 AM EST = +4; signal line is +17

7/28/11; 9:30 AM EST = -10

7/27/11; 3:46 PM EST = -26

7/27/11; 2:27 PM EST = -12

7/26/11; 10:00 AM EST = +4; signal line is +24

7/25/11; 9:30 AM EST = +4; signal line is +24

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. Retail flipped into the bearish camp yesterday and the NYA shows the markets slipped back into a secular bear again--albeit slightly. The SPX:VIX ratio was under 68 foretelling a big down day ahead for the indexes and once the 1329.60 level failed, the rout was on.

For the SPX today, the bears only need to push about a point and one-half lower to accelerate the selling again.  If 1303.50 is lost, the indexes will accelerate south again. The market bulls are simply trying to stop the bleeding today. The large drop in the indexes yesterday was not accompanied by weakness in utilities, that sector was flat, thus, this selling event is temporary and the markets will recover.

Typically, after a large sell off on a Wednesday, markets are weak Thursday morning but tend to recover by late morning. Considering the utes did not join the bearish band wagon, and that a positive debt ceiling agreement would launch markets skyward, caution is warranted.  Support and resistance in this area is 1321, 1318, 1316, 1314, 1312, 1307, 1300, 1298, 1297 (gap fill needed), 1295 and 1292.

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

7/29/11; 10:00 AM EST =

7/27/11; 3:46 PM EST = -26

7/27/11; 2:27 PM EST = -12

7/26/11; 10:00 AM EST = +4; signal line is +24

7/25/11; 9:30 AM EST = +4; signal line is +24

STOCK MARKET BEARISH -- SHORT

Keybot remains short to start the Wednesday session. The SPX dropped under 1331 yesterday so a quickie test of 1329-ish support occurred, but the bulls drove it up over 1331 again minutes later.  Just before the close the SPX dropped under 1331 once again but in a minute or two it was driven back above. Thus, the bulls defended that 1331 level to prevent a big drop in the indexes.

For the major sectors, semi's, financials, high volatility and commodites (ex-copper) are in the bear camp with utes, retail and copper in the bull camp.  Interestingly, retail is hinting that it wants to turn bearish while commodities want to join the bulls.  Watch CRB 349.5-ish level, if you see this taken out to the upside that tells you the indexes will receive buoyancy today. If CRB stays under 349.50 and retail is on the red side today, the markets will languish sideways to sideways down.

For the SPX today, the market bulls need to move six or seven points higher to tag 1338.50, if so, the buyers will come in force and drive the indexes several handles higher. If the market bears come to play and push under 1329.60, only two measly points (futures currently flat), the selling will accelerate thru 1329, and downward to test 1326, 1323, 1321. A move thru 1331-1337 is sideways slop. Markets are drifting along with this debt ceiling crisis. The algorithm did not print out any numbers after the pre-scheduled number yesterday, Keybot is simply idling along sideways for now, maintaining the short side.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST = +4; signal line is +24

7/25/11; 9:30 AM EST = +4; signal line is +24

STOCK MARKET BEARISH -- SHORT

Keybot remains short after the pre-scheduled number shows no changes.  Markets are trailing along sideways today so far but watch that 1331 handle, if it is lost, accelerated selling will occur. The financials, XLF, are under 15.28, the number Keybot is currently using as a bull-bear line so this fosters weakness in the broad markets.  Semiconductors made an attempt at a higher move after the open but promptly fell on its sword. Volatility, VIX, is now up and over 20 which is bearish. Watch retail, RTH, now at 110.06 and drifting lower. The algorithm is using a number of 109.43 as a bull-bear line, only about 50 cents lower. If retail hits this number the broad markets will weaken significantly.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST = +4; signal line is +24

7/25/11; 9:30 AM EST = +4; signal line is +24

7/24/11; 7:00 PM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 11:36 AM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 9:43 AM EST = +18; signal line is +24

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT

Keybot remains short ahead of the Tuesday session. A pre-scheduled number will click off at 10 AM.  In Monday's session, the financials, measured with XLF, dropped at the open casting a dark cloud on the markets all day long. The algorithm is now using a value of 15.30 for XLF to determine bullishness versus bearishness.  XLF sits at 15.21, nine cents under.  Thus, weak financials will weaken the broad markets so watch the XLF 15.30 level.

After the opening drop in the indexes on Monday, markets moderated and idled along sideways as the Congress clown circus continued the theatrics. For the SPX for Tuesday, if the market bulls can drive up thru 1344.32, then the buyers will enter in force, moving the SPX up to test 1347, 1349 and onward to the 1354 prior high. The market bears need to push the SPX lower to test 1331 and fail, if they can lose this 1331 handle, the selling will accelerate and the SPX will drop down in short order to test 1329, then 1326, then 1323. A move thru 1332-1343 is sideways slop. Markets remain unstable; watch to see what Keybot the Quant prints at 10 AM.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/25/11; 9:30 AM EST = +4; signal line is +24

7/24/11; 7:00 PM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 11:36 AM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 9:43 AM EST = +18; signal line is +24

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short.  What a difference a weekend makes.  SPX testing the 1331 and 1333 support levels now. Financials, measured by the XLF, fell under 15.32 at the bell and volatility, the VIX, spiked.  Markets remain unstable, stay on guard.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/25/11; 9:30 AM EST = +4; signal line is +24

7/24/11; 7:00 PM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 11:36 AM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 9:43 AM EST = +18; signal line is +24

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short to start the new trading week.  The Sunday pre-scheduled number had no impact today, the algorithm simply idles along unchanged.  The futures markets open shortly to provide initial hints on market direction.  For tomorrow, the financials are key just as they were on Friday.  The algorithm uses the XLF to gauge the financials, and now at 15.32, is exactly on the calculated number that Keybot is using currently to determine bullishness versus bearishness. The broad markets will follow whichever way the XLF moves after the opening bell tomorrow.

For the SPX in Monday's session, the market bulls only need to push upwards one point to touch 1346.10.  If this occurs, the buying will come in force, with the indexes roaring higher to 1347, 1349 and upward to test the 1354 high from 12 days ago.  If the debt ceiling talks deteriorate this evening into the Monday session, then the market bears have a chance to push things lower.  The bears need to get the SPX below 1337, if you see a 1336 handle, the gloves are off, the indexes will tumble lower in short order, testing 1333 and then 1331. A move thru the 1338-1345 range is a sideways day with no winner either way. Thus, all you need to watch for Monday's outcome is the behavior at XLF 15.32 and SPX 1346.10 and 1337.

Keybot is 21 points above where it shorted 10 trading days ago and will either flip long taking its lumps if the bulls run, or, stay the course if the mood is soured over the debt ceiling drama.  The algorithm will print two pre-scheduled numbers this week; one on Tuesday morning and one on Friday morning.  Markets remain highly unstable, stay on guard.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 11:36 AM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 9:43 AM EST = +18; signal line is +24

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot printed a late morning number taking the algorithm back above the signal line, ready to reverse to the long side, but, other algorithm rules continue to hold it back, at least so far, and Keybot remains bearish. As projected, the XLF 15.32 level, and SPX 1347 told the story today.

The market bulls could not touch 1347 so they were out of gas. The XLF dropped under 15.32 favoring bearish financials and thus bearish markets but a happier face was placed as the session progressed, with the financials flipping back above 15.32 to join the bulls again. Financials are very erratic currently. The close today and for the week places the XLF exactly on top of the algorithm's number to determine bearishness or bullishness, 15.32. This will require close watching after Monday's opening bell.  Keybot the Quant is idling now and will print out a pre-scheduled number tomorrow after which we can set the road map for the week ahead. The SPX is now 21 points above where the algorithm went short at 1324, very uncharacteristic behavior for the program and testimony to the unstable markets at the mercy of the news wires.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/22/11; 11:36 AM EST = +34; signal line is +25 but algorithm says stay short

7/22/11; 9:43 AM EST = +18; signal line is +24

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot kicks off a lower number shortly after the bell. That firmly places the algorithm back on the bearish side, amazing how Keybot came within seconds of going long yesterday but held back, and now the indexes are trailing lower. The robots are smarter than the humans. The SPX, however, remains about 13 points above where Keybot the Quant went short 10 trading days ago.

The news wires are leading to jumpy markets so who knows how the day will play out.  No attempt was made at SPX 1347 so this was a feather in the bears cap.  The XLF dropped under the 15.32-15.33 area, so the bears came to play today.  XLF now at 15.27 is back in the bear camp, and this weakness in financials will weaken broad markets.

The formidable S/R zone at 1329-1333 folded like a cheap suit the other day when price spiked up thru like it was not there, thus, a back kiss to 1333 would be in order.  SPX S/R is 1344, 1341, 1337, 1333, 1331, 1329, 1326. SPX now testing 1337 support. Markets remain unstable, stay on guard.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/22/11; 9:43 AM EST = +18; signal line is +24

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the quant remains bearish as the smoke is clearing from an odd day. Financials are now perceived to be bullish.  The XLF, now at 15.36, is three cents above the 15.33 level which the algorithm is currently using as a bull-bear line. The only two major sectors that remain bearish are semiconductors and commodities (ex-copper). Even though the algorithm perceives copper to now be bullish, it was weak today. A strong market should be led by copper not with copper in retreat.

The price swings are becoming more wild as trading volume lightens.  Volume is always light in the summer but more so now due to many traders trading small, reducing their positions, to avoid the magnitude of the beatings incurred from the wild whipsaw swings.

Keybot is in one of those unique modes where the signal line now wants the algorithm to be long, but, other programming rules must be satisfied to allow that to happen, and the algorithm is not permitting the move yet, so Keybot remains short.

For tomorrow, watch the XLF as described above to gauge broad market direction, markets will move the way the XLF above moves.   For the SPX, if 1347 is hit tomorrow, only three points higher, so watch for green futures, there will be a wild buying orgy into the summer weekend. SPX will jump to 1349, then test the next resistance level at 1354. The 1360 gap remains open and remains a target.

For the market bears for tomorrow, they need the XLF to get under that 15.33 level after the bell rings so bears must wish for bad banking news or earnings.  Bears need to push the SPX under 1326 for any significant selling to reignite, a formidable task. Bears would probably be content with a sideways move thru 1327-1346 into the weekend. Considering that price blew thru that strong resistance zone of 1329-1333 so easily, a retracement down to back kiss the 1333 would be in order.

Markets remain unstable. Keybot wants to flip to the long side after tomorrow's open, but only time will tell. Green futures are vital for the bulls to continue their fun but red futures will signify that this three day rally is suspect. Watch XLF 15.33 and SPX 1347 tomorrow; they will tell you everything you need to know about the broad market tomorrow.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short amid this craziness called a market.  The news wires are bouncing prices wildly, erratically.  The algorithm was within seconds of turning long but certain programming rules held it back. Note that the algorithm number is above the signal line satisfying the first step when Keybot is ready to change sides. If the SPX hits 1347 today, Keybot will probably flip to the long side, but, for now, the algorithm stays short and the SPX is 23 points above where Keybot shorted nine days ago.  The financials, measured by the XLF, now at 15.35, is two pennies on the bullish side of 15.33 which is the level used by the algorithm currently. Things are going the bulls way so far today. 1347+ would seal the deal for the bulls. Stay tuned, these are treacherous markets.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/21/11; 12:39 PM EST = +34; signal line is +23 but algorithm says stay short

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Despite the big pop, Keybot the Quant stays bearish. Volatilty dropped into the complacent bulls camp this morning once the positive economic data and news out of Europe hit the wires.  Oddly, copper is weak and semiconductors are muted. The algorithm clicked off a higher number now only two ticks away from wanting to join the bulls, but, for now, Keybot remains bearish.

Financials are the big mover today, now dancing with the bull-bear line as perceived by the algorithm.  The XLF, now at 15.30, needs to move above 15.32 to prove this broad market rally is real; only two measly cents.  If the XLF cannot get above 15.32, this broad market move up is suspect.  Use the XLF as your guide for the broad markets today.  Markets remain unstable, stay on guard, caution is warranted.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/21/11; 9:49 AM EST = +18; signal line is +20

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot remains short to start the Thursday session. Yesterday, the 1318 level was pierced to the upside so the bulls tried to accelerate higher. The formidable 1329, 1331 and 1333 resistance levels held the bulls back. Gaps above at 1344 and 1360 and below at 1297 and 1280 remain open.

The tell yesterday was in the behavior of commodities (ex-copper), semi's and volatility.  All three are perceived as bearish by the algorithm. The market bulls needed to win over two of the three to move higher--the bulls did not even get one of the three to change their stripes.

Today's futures are currently red and will fluctuate at 8:30 AM on Claims data. Stay on guard for a market pivot area at 10 AM when house pricing data, Philly Fed and Leading Indicators data are released.  Today is the Lalapalooza of Earnings, huge earnings day, with about 50 key companies reporting.

The SPX starts today at 1326. If the bulls can push up to touch 1330.50, in that formidable resistance zone, then the buyers will come into the markets in force. With the current red futures, if the day starts out with the bears pushing lower, once the SPX moves under 1324 the indexes will be in trouble. If the SPX loses 1323.65 this morning, the selling will accelerate towards testing support levels at 1323, 1321, 1319, 1316 and 1314. Just as 1329-1333 is formidable resistance above, 1314 is strong support below. Markets remain unstable and at the mercy of the news wires, caution is warranted.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short despite the euphoria in the broad markets today.  Note that the SPX, at 1327, is now three points above Keybot's entry for the short side nine days ago at 1324. The algorithm scanned today and did not click off any numbers during the session. The semi's, financials, volatility and commodities all remain in the bear camp, at least for now, and the utes, retail and copper are in the bull camp.

Thus, tomorrow will be a critical day. If the markets continue up, Keybot will have to flip long at some point so it will be interesting to watch. The algorithm is fixated on three key areas; commodities, semi's and volatility. Use the CRB, SOX and VIX, respectively, to determine if the bulls really plan on rocking higher, or not. The algorithm will more than likely need to see two of these three move to the bull camp for Keybot to flip long.

If the CRB, now at 347, moves above 349.60 (value calculated by Keybot) tomorrow, place a feather in the bulls cap. If the CRB stays below 349.60 as it is now, then the market bears are putting up a fight and the path up for the markets will not be easy.

If the SOX, now at 397, moves above 408.90 tomorrow, which is 12 points higher, a big 3% gain, place a feather in the bulls cap.  If the SOX cannot get above 408.90, the bears are putting up a fight.

If the VIX, now at 19.21, moves below 18.10, only a buck lower, not a big deal for volatility moves, then place a feather in the bulls cap.  If the VIX remains elevated and does not dip under 18.10, let's call it the 18.0-18.1 area, then the bears are putting up a fight.  So the market bulls probably need two of these three sectors to turn bullish to show that the rally mode is real, if not, then this move up in the broad markets today is a fake out. Semi's are the most likely to move to the bull side since the charts already started to bounce off of positive divergence.

For the SPX in Wednesday's session, if the SPX now at 1326.73, moves to 1328+, only a point and a half higher, it will be off to the races for the buyers, with several more handles higher on tap.  The only problem is that the SPX is coming into formidable resistance at 1329, 1331 and 1333 and if the SPX is headed up tomorrow, these levels are all three heavy duty overhead resistance values. The market bears need to drive lower to the 1307 level to get any strong negativity going again. If a 1306 handle is touched, the markets will flush lower with 1300 and 1297-1298 coming in quick order. The 1308-1327 range is sideways stuff.

Tomorrow we find out if the bulls plan on running, or not. If you see green futures it will be a bull's party tomorrow, since only a point or so is needed of upside to begin a wild buying orgy again.  Red futures will signify that the upside is not so guaranteed. Markets remain unstable, caution is warranted.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short after the pre-scheduled number printed at 9 AM. After the open, the market bulls ran higher, touching the 1316 handle, thus, accelerated upside would be expected. The 1318 resistance was attacked first and took three tries for price to bust up thru. SPX S/R of 1312, 1314, 1316, 1318, 1321, 1323 and 1326 now in play.

Since the SPX broke up thru 1316 today, the upper levels have a good chance of being tested today; 1321, 1323, 1326. Note that the SPX 20 day MA is now above the 50 day MA and price is above both MA's, which is considered bullish.  RSI at 52% favors bulls while stochastics and money flow under 50% favors bears. Markets remain unstable, stay on guard.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST = +4; signal line is +19

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot remains short. The algoirthm printed a higher number in front of the close but that did not change the current bearish posture.  Retail, measured by RTH, did not fail the 109 level so that helped stop the selling yesterday.  The NYA, after slipping under the 40 week MA to indicate long term bearishness ahead for markets, recovered late day and now is back above the 40 week MA indicating that the secular bull market remains in place.

For the SPX today, the futures are green currently.  SPX starts at 1305 and if the market bulls can follow thru with the futures and touch the 1316 handle, the upside will accelerate and several more handles will click off quickly, moving up to test resistance at 1318, 1321 and 1323. The market bears need to push lower today to lose the 1296 handle if they plan on regaining downside momentum. A move thru 1297-1315 is a sideways rest day.

Housing Starts are a key data point each month so watch that closely in a couple hours time since it will move futures. Yesterday the SPX came down to touch the 1297 gap and this is the same level as the 62% Fibonacci retracement before bouncing.  The candle shows that the close was slightly above the halway point on the candle so these circumstances favored the bulls for today. Financials and semiconductors have been beaten badly but now show positive divergence on the charts which should help the bulls in the coming days.  Markets remain unstable, caution is warranted.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST =

7/18/11; 3:54 PM EST = +4; signal line is +17

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short as the Monday session moves along. The algorithm clicked off a lower number at 10 AM reinforcing the broad market downside.  Markets remain unstable so continue to expect wild moves in the markets.

The NYA 40 week MA cross failed this morning indicating a move by the indexes towards secular bear markets.  This occurred last month only to recover so simply watch this cross moving forward for hints on market direction. Retail, RTH, is maintaining price above 109 which is the level Keybot is scanning currently. As long as RTH remains above 109, this broad market selling should be limited. If RTH 109 fails then further broad market downside would be expected.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST =

7/18/11; 10:06 AM EST = -10

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains bearish to start the week. The major sectors remain entrenched either in the bear camp, as with financials, semi's, commodites (ex-copper) and volatility, or in the bull camp, as with utilities, copper and retail. The algorithm would view commodities as bullish if the CRB would get up and over 350, now at 346. Keybot would view retail as bearish if the RTH would lose the 109 handle, now sitting only about one point above at 110.35. 

The bulls have the wind at their backs to start Monday's session. If the futures are green, and the bulls move the SPX up by only a point and one-half higher to touch the 1318 handle, it will be off to the races for the upside with 1321, 1323 and 1326 levels on tap for testing.

The bulls need to drive lower to the 1307 gap area if they expect to get any substantial selling started.  If the bears can get under the 1308 handle, the selling will accelerate and the SPX will move down to the 62% Fibonacci retracement and gap fill at 1298-ish.

1308-1317 represents sideways slop.  Typically, markets will move opposite on Monday as compared to the Opex Friday close.  Friday was very strong up into the close, thus, some weakness would be anticipated for Monday morning. Even if the indexes run higher after Monday's opening bell, stay on guard for some potential weakness to develop to satisfy this typical seasonality.

There is one pre-scheduled number for this week on Tuesday morning.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST =

7/17/11; 7:00 PM EST = +4; signal line +15

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot remains short after the 10 AM pre-scheduled number shows no change. The early bull euphoria today was dampened slightly on Consumer Sentiment data. The Euro stress test results will set the tone for the remainder of the day. Positive C and JPM earnings are not helping financials.  Copper remains elevated providing the buoyancy in the markets.

SPX:VIX ratio remains under 68 which is negative for the markets. Watch CRB 350.30 level, now about four points below. If the bulls want to run higher, they need to get the CRB above 350.30 and the SPX:VIX ratio above 68. Otherwise, any move up should be muted. SPX 1306.50 remains key today. Indexes will move out sideways today unless 1306.50 fails, if so, we will see 1298-1300 in short order.

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

7/29/11; 10:00 AM EST =

7/26/11; 10:00 AM EST =

7/24/11; 7:00 PM EST =

7/19/11; 9:00 AM EST =

7/17/11; 7:00 PM EST =

7/15/11; 10:00 AM EST = +4

7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)