STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant finishes the week on the bear side. The algo did not print any further numbers during the Friday session. The failure of the SPX 12-month MA at 1290-1292 was an important turning point for markets; now committing fully to the bear side. As long as the SPX remains under this important moving average, the markets will continue along sideways to sideways down indefinitely.

The CRB dropped under 270. This means that quantitative easing, QE3, is now imminent, and more likely a global intevention program involving the Fed, ECB, BOE, China, Germany, emerging markets and Japan is likely.  The FOMC meeting rate decision and press conference is 6/20/12 so this serves as a bookend. Thus, QE3 will likely be announced anytime now thru 6/20/12, which is only about twelve trading days. Watch for Japan to announce currency intervention first, that should forecast that QE3 is following along quickly, either right away or within a few days time. The timing of QE3 is obviously important since equity markets will turn on a dime and catapult higher for another easy money printing press rally.

For next week the SPX 12-month MA is the most important thing to watch, also the utilities sector, UTIL, and retail sector, RTH. The sectors, indexes and levels of interest can be identified tomorrow once Keybot prints the pre-scheduled Sunday number. For now, the bears are cruising. Keybot has been on the short side for one month now, since 5/4/12, and is enjoying an over one hundred handle SPX move down on the short side thus far for the ongoing trade in progress. Extreme caution is required moving forward since the printing presses (quantitative easing) can be activated at anytime.

6/3/12; 7:00 PM EST =

6/1/12; 9:45 AM EST = -44 signal line -21

6/1/12; 9:00 AM EST = -30 signal line -19