STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the new trading week begins. High drama last week as the markets were on the verge of going over the falls in both the Tuesday and Friday sessions, as indicated by the UTIL 50 week MA, but the bulls stopped the collapse each time. To start the week, UTIL begins at 419.89. If UTIL drops under 415.70, the broad markets will go into free fall. If UTIL moves above 427.21, this confirms a recovery rally is rocking again. In between is a continued sideways market funk.

If UTIL remains in that middle range, watch retail for clues, especially with the retail data Wednesday morning. RTH, now at 101.26, will signal broad market recovery if the 103 handle is attained, otherwise, the market bears remain in control of the markets.

Despite all the wild action in the markets, the SPX has moved within a 100 point range (excluding an intraday low and two intraday highs), between 1120 and 1220, for 26 trading days, back to early August as the initial waterfall drop finished up. For the SPX in the Monday session, the market bears have the wind at their backs since the indexes closed near their lows and the news keeps getting worse out of Euroland.

If the SPX, starting at 1154.23, drops under 1148.37, the selling will accelerate and a test of 1140 will occur quickly, and likely a move towards 1120 early in the trading week. If the SPX regains 1185, a 30 point upside, not likely at this juncture but you never know if happy talk may start the week out on an up beat for a change, then the all clear is given to the bulls and the upside will accelerate. A move thru 1150-1184 is sideways indecision. Volatility remains high and markets are very unstable, bears are favored but these markets can change rapidly. The indexes are at the mercy of Europe's news. The algo is operating in a lower risk mode currently due to the whipsaw action last week.

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

10/2/11; 7:00 PM EST EOM =

9/30/11; 10:00 AM EST =

9/27/11; 10:00 AM EST =

9/25/11; 7:00 PM EST =

9/20/11; 9:00 AM EST =

9/18/11; 7:00 PM EST =

9/16/11; 10:00 AM EST =

9/11/11; 7:00 PM EST = -72; signal line is -56

9/8/11; 3:51 PM EST = -72; signal line is -55

9/8/11; 3:39 PM EST = -56; signal line is -53

9/8/11; 3:00 PM EST = -72; signal line is -52

9/8/11; 2:32 PM EST = -56; signal line is -51

9/8/11; 2:28 PM EST = -72; signal line is -50; go short 1186; (Benchmark SPX for 2011=-5.7%)(Keybot this trade=-1.2%; Keybot for 2011=+25.9%)(Actual this trade via SSO=-2.0%; Actual for 2011=+39.3%)