STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant motors along on the long side. The bulls have the upper hand but the markets remain unstable. The big thrust came at the open when the SPX:VIX ratio moved above 35; that announced the market launch for the indexes. Continue to watch the 35 level for the ratio in the days ahead.

The retail sector, RTH, sees fishy action into the close. The algo is monitoring RTH 104.04. At the close in real time, the print was higher, the last three minutes of trading saw the RTH move above this critical level. Then, as further settlement occurred after the bell, the 'final-final' print dropped back below the quant's number of 104.04. Thus, at the opening bell tomorrow, watch to see if RTH can move above 104.04, if so, the broad market rally has further legs, if not, then the bulls are running out of steam.

For the SPX tomorrow, Tuesday, since price closed near the highs, the market bulls have the wind at their backs. All the bears need to see is green futures and that will indicate that the upside party remains in full swing, pop another cork. For the market bears to stop this six day rally, they need to push under the 1178 handle. If the bears can touch an 1177 handle, the selling will pick up quickly in force and the SPX will drop additional handles from there. The 1179-1209 range is sideways action with no resolution. Keybot prints a pre-scheduled number at 10 AM.

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 = -72; signal line -77

8/26/11; 10:00 AM EST = -72; signal -77

8/23/11; 11:51 AM EST = -72; signal line is -77; go long 1146; (Benchmark SPX for 2011=-8.9%)(Keybot this trade=+13.4%; Keybot for 2011=+21.2%)(Actual this trade via SDS=+25.6%; Actual for 2011=+28.4%)