Tuesday, October 25, 2011


Keybot the Quant remains long despite the early selling. Note the VIX jumped higher again, directly into the open arms of the market bears. Utes, semi's--despite TXN's weak earnings and guidance, financials and retail are the four sectors that continue to support the broad market recovery rally.

The SPX touched the 1238 handle and collapsed to 1233 as would be expected, then bounced.  Support and resistance levels for the SPX are 1233, 1235, 1240, 1242, 1247, 1249, 1252, 1257, 1258, 1259. The starting year number is 1257.64.

The VIX above 30 favors market bearsWatch UTIL 432, SOX 368, RTH 107 and XLF 12.75, all prices are now comfortably above favoring market bulls. Should the bears start to push lower, the financials, XLF, will probably be the first to fail, so watch that one very closely. Last print for XLF is 13.12, 37 pennies above danger, and currently helping keep the broad markets buoyant. Stay on guard, the algo has placed the caution flag in play again. The algo should turn short if any of the four strong sectors turn bearish at the levels shown. If the four sectors remain strong, so will the markets.

10/31/11; 7:00 PM EST EOM =
10/30/11; 7:00 PM EST =
10/28/11; 10:00 AM EST =
10/25/11; 10:00 AM EST = -8; signal line is -20
10/25/11; 9:30 AM EST = -8; signal line is -20
10/24/11; 10:34 AM EST = +6; signal line is -21
10/24/11; 9:30 AM EST = -8; signal line is -23; go long 1238; (Benchmark SPX for 2011=-1.6%)(Keybot this trade=-2.7%; Keybot for 2011=+26.4%)(Actual this trade via MYY=-3.8%; Actual for 2011=+36.5%)

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