Thursday, November 1, 2012

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short going into the Friday session. The algo did not print any other numbers after the pre-scheduled number today.  A pre-scheduled number prints at 9 AM so the market action can be updated before the opening bell tomorrow.  The caution flag is out due to the dramatic jump in the semiconductors today.  The SOX is at 379.50 and only needs to move above 380 (it tested 380 today) to strongly bolster the upside rally. Further, if the VIX drops under 15.90, that would further accelerate the upside.  If SOX and VIX cross the numbers shown, it is also likely that Keybot will flip back to the long side. Hence, the caution signal. GTX 4920 remains important as well. Bulls need a move above 4920 to further launch the upside rally.

On the bear side, the RTH must drop under 44.44 for the bears to breathe easy. Also, if the financials, XLF, drop under 15.60 that will also cause the markets to weaken. The Jobs Report at 8:30 AM EST will set the tone for the markets. For the SPX starting at 1428, the bulls only need a single point, to punch thru the strong 1429, and the markets will run several handles higher and the liklihood that Keybot flips long will greatly increase.  The bears must retrace todays up move of 15 handles and push the SPX under 1412 to reaccelerate the downside to the low 1400's again, a formidable task but not at all impossible.  A move thru 1413-1428 is sideways action.

The bulls want to see the SOX over 380, VIX under 15.90 and GTX over 4920. If two of these three occur, Keybot will likely flip long. The bears want RTH under 44.44 and XLF under 15.60.  Any one of these will allow bears to resume the market downside. A turn may be imminent. The answer will be shown by the S&P futures at 8:31 AM.

11/4/12; 7:00 PM EST =
11/2/12; 9:00 AM EST =
11/1/12; 10:00 AM EST = +1; signal line is +23
10/31/12; 7:00 PM EST EOM = +1; signal line is +25

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