Tuesday, November 22, 2011

STOCK MARKET BEARISH -- SHORT

Keybot the Quant is short to start the Tuesday session.  Retail and volatility will gauge bear strength today. If RTH stays below 108.75, now at 108.06, the market bears are fine despite any market pop that may occur.  Likewise, if VIX stays above 31.50, now at 32.91, the market bears are fine.

SPX:VIX ratio at 36.25 is supporting the market bulls. The ratio fell under 35 yesterday which ushered in market weakness but at about 2 PM EST popped above 35 signaling a recovery in the markets which occurred. Thus, market bears have no momo unless they can push the ratio under 35. Markets will recover with the ratio above 35.

Utilities are the only sector that is supporting the market bulls currently, as measured by the algo.  UTIL is at 436.38. If UTIL loses the 425 level that signals broad markets that will be dropping rapidly.  UTIL is above 425 by over ten points so the utes are continuing to provide market support. The broad market move down is suspect since the utes will typically lead or at least be conicdental with the broader indexes if the move down has long staying power, this is not the case currently.

In a nutshell, to keep it simple, watch RTH 108.75, VIX 31.50 and SPX:VIX 35 to determine broad market direction today.

11/30/11; 7:00 PM EST EOM =
11/29/11; 10:00 AM EST =
11/27/11; 7:00 PM EST =
11/23/11; 10:00 AM EST =
11/21/11; 9:30 AM EST = -56; signal line is -18
11/20/11; 7:00 PM EST = -40; signal line is -16
11/17/11; 12:12 PM EST = -40; signal line is -14
11/17/11; 9:00 AM EST = -24; signal line is -13
11/16/11; 3:11 PM EST = -24; signal line is -12
11/16/11; 1:26 PM EST = -10; signal line is -12 but algorithm says stay short
11/16/11; 9:30 AM EST = -24; signal line is -12
11/15/11; 3:58 PM EST = -10; signal line is -12 but algorithm says stay short
11/15/11; 1:36 PM EST = +6; signal line is -10 but algorithm says stay short
11/15/11; 12:35 PM EST = -10; signal line is -10 but algorithm says stay short
11/15/11; 11:27 AM EST = -24; signal line is -9; go short 1247; (Benchmark SPX for 2011=-0.9%)(Keybot this trade=-0.3%; Keybot for 2011=+24.0%)(Actual this trade via SPY=-0.7%; Actual for 2011=+28.2%)

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