The algorithm perceives the financials, semi's and commodities sectors to be bearish, as well as the rise in volatility. For hints of further broad market weakness, watch the NYA 40 week MA cross. NYA closed at 8229, only about 100 points above the 40 week MA at 8119. A loss of the 8119 level will verify continued negativity.
Watch retail, RTH now at 110.92. Keybot is watching the 109 level. Thus, if RTH loses two points that spells further broad market trouble. The SPX:VIX ratio stayed above 68 which is actually a feather in the bulls cap, but with the weak futures, the ratio may drop sub 68 today which means a big down day for the indexes. Volatility, the algorithm uses VIX as the measurement, did not cimb as much as would be expected for yesterday. Thus, watch the VIX now at 18.39. Bears need to stay above 18 to keep the indexes moving southbound. If you see the VIX lose the 18 handle, then the bulls are wrestling back control of the markets and the selling is finishing.
For today, SPX begins at 1319.49 with red futures. The wind is at the bears back at the open since only three points lower is needed to accelerate the selling once again, and the futures look like they want to deliver that three points. If 1316.50 is lost after the opening bell, the selling will accelerate lower testing the support levels mentioned above. The 1307 gap fill is an attractive target. The bulls need to touch 1343 to get any momo back for the upside, a formidable task for today. Watch 1316.50 to see if it holds or fails after the bell riings.
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)
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