STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short to start the new week of trading. The overnight behavior in copper into the Monday open should dictate the broad market direction. If copper moves up so will the markets, if copper moves down, the broad indexes will sell off.  When the bell rings, watch JJC 48.83, price sits directly on this bull-bear line.  Whichever way it moves it takes the markets with it.

Watch CRB 312.50 level, now at 314.47, affecting the markets bullishly.  If the 312.50 level is lost the market bears will push the broad indexes lower. The dollar will tell the story since an up dollar will result in JJC falling under the 48.83 and CRB heading lower to test the 312.50 favoring the market bears but a down dollar will result in JJC spiking above 48.83 and perhaps over 49, and the CRB will remain elevated thus keeping the broad indexes elevated and headed higher.

The other key sector that Keybot is now scanning is the utilities, UTIL, watch the 446.15 level. Last week UTIL moved in a very tight 450-456 range so this week look for a stronger move committing to one side or the other. The bulls are happy if UTIL stays above 446 but if failure occurs at 446, the broad markets will be in serious trouble. In addition, the week will become interesting as Friday approaches. By the Friday close, the bulls must keep UTIL above 463 and price currently sits 10 bucks under.  Thus, watch 446 for UTIL now thru 3 PM EST on 3/30/12, then in the final hour of trading Friday, watch 463 for UTIL.

For the SPX for Monday, starting at 1397, the bulls have the easy path ahead since only two points are needed, to poke up thru 1399, and the market upside will accelerate higher to 1403 and 1406. The bears need to see a drop of ten points to 1387 to reignite an accelerated move lower.  A move thru 1388-1398 is sideways action.

Tomorrow we find out if Keybot whipsaws, or not. The quant uses a 48-hour timer to identify a whipsaw so the move short was Thursday at 10:51 AM so the first hour and one-half of trading on Monday will be very important.  Copper will dictate the market direction as described above. If JJC moves above 48.83 and the SPX moves to 1400 and higher, Keybot will likely flip back to the long side.  The algo prints two pre-scheduled numbers this week, one on Tuesday morning and one on Friday morning. The EOM and EOQ1 occurs at the Friday close this week. Markets remain unstable clearly shown by the shaky market action last week with the oil volatility, the TVIX volatility derivative failure, AAPL trading halt and BATS Exchange mini-flash crash failure. Stay alert and cautious.

4/1/12; 7:00 PM EST EOM EOQ1 =

3/30/12; 10:00 AM EST =

3/27/12; 10:00 AM EST =

3/25/12; 7:00 PM EST = +76; signal line is +64 but algorithm says stay short

3/23/12; 10:59 AM EST = +76; signal line is +63 but algorithm says stay short