Saturday, March 17, 2012

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the bulls perform an Irish jig on St. Patty's Day. The algo did not print any numbers the entire week except for the pre-scheduled number yesterday. This shows the bulls in control and the markets in idle mode.  As always, however, things can change in a heartbeat. The weakness in utes must be watched over the next couple weeks.  As yields creep higher in Treasuries the last few days, utilities weakened.  For the next two weeks, thru the end of March, the UTIL 446-447 level is critical. So jot 447 on a piece of paper to watch for the new week ahead.  UTIL is at 453.60, about 7 points above the 447 level which will signal serious broad market trouble if/when it fails.

The dollar is key. The market bulls are happy with the weaker dollar which boosts commodites, copper and equities.  The last few days the dollar was moving more in sync with equities but that relationship is not expected to last.  Very simply, market bulls want to see the dollar weakness continue, market bears want to see a stronger dollar which will push commodities, copper and equities markets lower.

Once the Sunday pre-scheduled number prints tomorrow, the new week can be set up in more detail. Markets are erratic and not to be trusted with a large move down for the broad indexes on the table and a distinct possibilty.

3/18/12; 7:00 PM EST =
3/16/12; 10:00 AM EST = +76; signal line is +67
3/11/12; 7:00 PM EST = +76; signal line is +67
3/9/12; 9:00 AM EST = +76; signal line is +66
3/8/12; 12:04 PM EST = +76; signal line is +66; go long 1364; (Benchmark SPX for 2012  = +8.4%)(Keybot this trade = -1.6%; Keybot for 2012 = +3.1%)(Actual this trade = -1.6%; Actual for 2012 = +5.8%)

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