Keybot the Quant remains short to start the week but the algo is itching to go long. Note that the algo number is above the signal line for three days now so this means Keybot should flip to the long side, but, other algo rules must be satisfied, and these programming rules are not ready to allow Keybot to go long. That may change early this week.
The key to the markets is watching the utes, UTIL, now at 417. Watch 414 and 437. Above 437 confirms a huge recovery rally. A move thru 414-437 this week favors sideways markets with a move towards a recovery rally. A failure of 414 represents a trap door, the broad markets will collapse. If the markets regain their footing early this week, watch the SPX:VIX ratio, now at 26, if this moves above 35, this will correspond to a huge up day for the indexes as well as a confirmation of a recovery rally in place.
For the SPX, starting at 1124, a move above 1155 may be the ticket for Keybot to move to the long side, at 30 points higher, a formidable task. If 1155 is hit, the buying will substantially increase in the markets and the SPX will jump higher to test 1160 quickly. The market bears have the wind at their back since the markets closed near the lows on Friday. If the market bears simply push a couple points lower, to lose that 1122 handle and touch an 1121 handle, the sellers will jump in fast, accelerating the move down in short order, more than likely pushing down to test that 1101 low from about eight days ago. A move thru 1123-1153 is sideways slop.
Stay alert, Keybot the Quant wants to go long but the robot is not convinced yet. Perhaps Monday or Tuesday will provide the clarity. One pre-scheduled number will print this week on Friday morning.
9/4/11; 7:00 PM EST =
9/2/11; 9:00 AM EST =
8/31/11; 7:00 PM EST EOM =
8/30/11; 10:00 AM EST =
8/28/11; 7:00 PM EST =
8/26/11; 10:00 AM EST =
8/21/11; 7:00 PM EST = -72; signal line is -77 but algorithm says stay short
8/17/11; 11:52 AM EST = -72; signal line is -75 but algorithm says stay short
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