STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot remains short. The algorithm idled along yesterday without clicking off any numbers. Thus, that is two days in a row that Keybot calmly motors thru the markets despite all the news and turmoil.  Volatility, VIX, dropped down towards 18.10 yesterday but could not break under 18, therefore, the rally was suspect, and the markets did sell off into the close.

For today, commodities are key.  Watch the CRB 350.55 level, now at 349.17, only about 40 pennies under. CRB is in the bear camp currently, as perceived by the algorithm, but a move above 350.55 will turn the commodities sector bullish. The behavior of the CRB around the 350.55 level is very important today.

For the SPX for today, starting at 1318-ish, the bears only need to move three points lower to the 1314.50 level, if so, the selling will come in force and much lower support levels will be explored with the 1307 gap as a likely target. The bulls must gather some intense strength to be able to touch a 1331 handle, but that is what they have to do if they want to regain and maintain control of the equities markets. A move thru 1315-1330 is sideways slop.

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 =

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

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

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)