Tuesday, October 16, 2012

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips to the long side after the open at SPX 1446.  The utilities bounced strongly taking out the UTIL 478.43 level which causes a leg higher for the broad indexes.  The UTIL 478.43 is applicable all week long so there is lots of drama ahead this week.  The semiconductors are the only major sector perceived to be in the bear camp by the quant.  The algo number and signal line are only four ticks away from each other so extreme caution is required moving forward.  Note that Keybot's algorithm program has now pulled ahead of the SPX Benchmark Index by one-half percent on the year. The actual trading, which accounts for all the timing issues, commissions and so forth, has gained over 9% on the year, a return anyone in the biz would welcome. Keybot closed the SDS trade and rotated into SSO. The last trade resulted in a one-half percent gain.

The quant is now fixated on utilities and semiconductors.  The markets will sustain a rally and move higher if the bulls can push the SOX up thru 386. The SOX is at 377 right now.  The bears need to push UTIL back under 478.43 to regain downside momo. If SOX stays under 386, and UTIL over 478.43, then markets travel sideways with an upward bias. As always after a turn, stay alert for a whipsaw, which would not be surprising in these jumpy markets.

10/17/12; 9:00 AM EST =
10/16/12; 9:31 AM EST = +60; signal line is +56; go long 1446; (Benchmark SPX for 2012 = +14.9%)(Keybot this trade = +0.4%; Keybot for 2012 = +15.6%)(Actual this trade = +0.5%; Actual for 2012 = +9.3%)
10/14/12; 7:00 PM EST = +44; signal line is +56
10/12/12; 10:00 AM EST = +44; signal line is +56
10/9/12; 10:42 AM EST = +44; signal line is +57; go short 1452; (Benchmark SPX for 2012 = +15.4%)(Keybot this trade = -0.1%; Keybot for 2012 = +15.2%)(Actual this trade = -0.1%; Actual for 2012 = +8.8%)

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