STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long going into the Fed decision tomorrow. The algo moved sideways for the third day in a row without printing any numbers.  The semiconductors teased failure yesterday and the utilities teased failure today.  Continue watching SOX 393, UTIL 464.31 and VIX 18.25.  All three are bullish, if any one turns bearish, Keybot will likely flip short.  UTIL is at 467.89 only three points away from failure that will drag the broad indexes lower. Further, the UTIL 50-week MA, which represents a trap-door in the markets, is at 461.37, only about six points lower. If 461.37 fails, it is highly likely the broad markets will drop into free fall. It is interesting that everyone is on the bull side, including Keybot, for now, expecting the Fed to deliver a huge half-trillion dollar QE program tomorrow, and, if the Fed does, the markets will catapult higher.

For the SPX starting at 1437, the bulls need to punch thru the high today at 1439.15, if so, the bulls are going to accelerate higher slicing thru the four-year intraday high at 1440.24 like a hot knife thru butter, then heading upwards to a gap fill at 1446. The bears need to drop under 1433 to accelerate a downside move that will drop thru 1429 and 1427 in short order and likely test 1424. A move thru 1434-1438 is sideways action but very unlikely tomorrow considering the big news from the Fed hits at 12:30 PM EST, then 2:15 PM in the press conference. Hang on to your hats. In a nutshell, SOX 393, UTIL 464.31, VIX 18.25, and SPX 1439.15 (for bull glory) and 1433 (for bear glory) will dictate market direction for Thursday.  A turn may be imminent.

9/16/12; 7:00 PM EST =

9/14/12; 10:00 AM EST =

9/9/12; 7:00 PM EST = +76; signal line is +63

9/7/12; 9:00 AM EST = +76; signal line is +63