Thursday, May 10, 2012

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short. The drama yesterday occurred in the retail sector. RTH lost the 41.35 level to help the market bears but then recovered as the day moved along. Another stutter step occurred with RTH once again dropping under the critical 41.35 level but recovering again. Then at 3:15 PM EST, RTH came down to test 41.35 once again which resulted in a bounce.  RTH then drifted lower to close only two pennies away at 41.37.  How does Keybot know these numbers to watch ahead of time? Thus, watch RTH 41.35 very closely during the Thursday trade. Staying above RTH 41.35 and market bulls will rejoice. If RTH loses 41.35 the markets will commence another leg lower.

Another key tool is the SPX:VIX ratio 68 level. For the last two days the bulls and bears are fighting over this battle ground. Watch this closely since above 68 and the bulls win but below 68 says the bears will win moving forward.

For the SPX for Thursday, starting at 1355, the bulls need to touch the 1364 handle and the market upside will accelerate.  The bears need to drop under 1343 and markets will accelerate lower. A move thru 1344-1362 is sideways action. Markets remain unstable. Use RTH 41.35 and SPX:VIX 68 to determine broad market direction moving forward.

5/13/12; 7:00 PM EST =
5/11/12; 10:00 AM EST =
5/9/12; 1:02 PM EST = +0 signal line +17
5/9/12; 12:44 PM EST = -16 signal line +18
5/9/12; 10:47 AM EST = +0 signal line +19
5/9/12; 9:30 AM EST = -16 signal line +19

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