STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is short as the new trading week is set to begin. The Spain request for a bailout, or not, is pushing markets up and down, perhaps resolution will occur this week.  When the algorithm has jumped higher in recent days, it has been favoring the +60 level. Should that occur this week, that would place the algo number above the signal line and Keybot will want to flip back to the long side.  For Monday, it appears that the semiconductors will likely dictate market direction. Watch SOX 395.43. Semi's start under this level which creates market negativity. The market bulls will try to push SOX above 395.43 which would position Keybot towards moving to the long side. As a pre-market indication, watch INTC, TXN, TSM, and other semi's, if they are moving lower, the bears will be happy, if moving higher, that will push SOX higher after the open and make the bulls happy.

The utilities, UTIL, need to move above 483.05 this week to create extended broad market upside and enable bulls to push markets higher. Otherwise, without attaining 483, the broad market upside is limited. This level is in place for all five days forward and UTIL begins at 471.35 eleven points away obviously favoring the market bears.  Volatility is expected to jump and the quant is tracking VIX 17.85. At 13.98, however, the bulls are keeping volatility low and the markets elevated.

For the SPX starting at 1460, the bulls need to touch the 1467 handle (the high this year is 1466) and it is off to the races with price heading towards a test of the 1475-ish high from a few days ago in short order.  The SOX will be over 395.43 and the bulls will be targeting UTIL 483 with a new upside market orgy move. The market bears are driving the bus to start the week, however, and have the SOX in their camp.  The bears have an easier road to hoe since they only need to push the SPX under 1459.50, Friday's LOD, only one-half point lower, and the bear growling will grow much stronger with a market acceleration to the downside. Therefore, watch the overnight futures, if there is any hint of negativity with a tinge of red numbers, the bears are going to come to play tomorrow. A move thru 1461-1466 is sideways action for Monday. Markets are very erratic and unstable. Keybot prints two pre-scheduled numbers this week, one on Tuesday morning and one on Friday morning. Expect the unexpected. In a nutshell, SOX 395.43 will tell you market direction.

9/30/12; 7:00 PM EST EOM EOQ3 =

9/28/12; 10:00 AM EST =

9/25/12; 10:00 AM EST =

9/23/12; 7:00 PM EST = +44; signal line is +58

9/21/12; 3:53 PM EST = +44; signal line is +59