STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long to start the Friday session. The algo is idling along without printing any numbers since going long on Wednesday, unimpressed with the jittery market action. There is no whipsaw, so far, but today will need to play out. The quant defines a whipsaw as a revesal move within 48 hours time, thus, if the markets make it to 11 AM EST today, the whipsaw will be off the table. If you were watching the NYA 40-week MA at 7644, you saw price come within about 30 points of this bullish goal, but then fell on its sword.  A new bullish leg will begin for markets when NYA 7644 is attained, but if the level is not attained, the bears will continue limiting the market upside.

On the downside, the bears need to push back under the SPX 12-month MA at 1292-ish for the bulls to reignite strong negativity and usher in an extended bear market. A direct gauge to use in today's trade is the RTH 41 level. The algo is fixated on the retail sector in response to near term market movement. RTH begins today at 41.20. Futures are weak as this missive is written about five hours before the U.S. open.  Therefore, if a market sell off begins at the bell, pay attention to RTH 41, if it fails, the bears got game and next keep an eye on the SPX 1292-ish described above.  If the markets sell off, but RTH stays above 41, the market bears got nothing today.

For the SPX starting at 1315, the bears have the easier path today since they need only a couple red futures points, to drop under 1313, to begin a downside acceleration. The futures are down large so an acceleration to test key 1307 support may be on tap.  The bulls must touch the 1329 handle to accelerate the upside fun and restart the bull rally party, a formidable task for today.  Instead, bulls will focus on preventing the RTH from dropping under 41 at all costs. A move thru SPX 1314-1328 is sideways action. The utilities sector will become more important with each day forward since Keybot is now scanning UTIL consistently. The high volatility, VIX, will continue to cause the large up and large down days for the broad indexes. Exercise caution. If the RTH fails 41 at the open, and the SPX tumbles down thru 1312, there is a high liklihood that Keybot will flip back to the short side today.

6/10/12; 7:00 PM EST =

6/6/12; 11:02 AM EST = -14; signal line is -23; go long 1305; (Benchmark SPX for 2012  = +3.7%)(Keybot this trade = +5.6%; Keybot for 2012 = +7.2%)(Actual this trade = +5.4%; Actual for 2012 = +7.4%)