STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long as the bulls put the pedal to the metal and cruise higher today; the SPX threatening multi-year highs before falling on its sword.  Interestingly, the SPX filled the gap from 2008 at 1424-1426. Remember months ago we watched the SPX come up for this gap fill and it failed. Price has now fulfilled its mission.  JJC popped thru 43.65 finally blessing the market rally with some street cred.  JJC dropped late day but then recovered into the close.  Watch JJC 43.61 for Wednesday. The market rally will move higher if JJC stays above 43.61, if JJC drops under 43.61, the markets will sell off.

Note the drop in the utilities sector today which is bearish for markets.  UTIL closed with a 475 handle and a 472 will signal major market trouble ahead.  For the SPX for Wednesday, starting at 1413 support, the bears need to see negativity in the overnight futures, a smidge will do, and a downside acceleration will continue to 1410, 1406 and 1403.  The bulls need to prevent any significant downside and easily do that by keeping JJC above 43.61.  A move thru SPX 1414-1425 is sideways action. Markets remain highly unstable. Watch UTIL 472, JJC 43.61 and SPX 1413. Interestingly, if both UTIL 472 and JJC 43.61 fail, Keybot will likely flip to the short side.

8/26/12; 7:00 PM EST =

8/21/12; 3:44 PM EST = +76; signal line is +48

8/21/12; 3:04 PM EST = +60; signal line is +48

8/21/12; 9:30 AM EST = +76; signal line is +47

8/19/12; 7:00 PM EST = +60; signal line is +47