STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flipped to the short side at 3:56 PM, four minutes before the close, at SPX 1399.  The financials, XLF, and volatility, VIX, jumped into the bear camp and triggered the quant to turn bearish. The last trade results in a 2% gain for the algorithm program and a 3.6% in the actual trading. Keybot has now returned 21% this year twice the S&P Benchmark and four times above the average hedge fund return at 5%.  As always, stay alert for a whipsaw tomorrow. Keybot exited SSO and entered SDS. XLF 15.65 and VIX 15.84 are key in the opening minutes of trading tomorrow. Both are bearish. The bulls must push one or both into the bull camp to stop the markets from dropping, otherwise, the markets will sell off in earnest.

For the SPX tomorrow (Wednesday), starting at 1399, the bulls need to touch 1409 and an upside acceleration will occur immediately attacking the 1412-1413 resistance. The bears only need a smidge of negativity in the overnight futures and that will be enough to trigger a downside acceleration once the opening bell rings taking the SPX down to test 1391 support in short order. Bulls must keep the futures green overnight.  A move thru 1400-1408 is sideways action. Markets remain erratic and unstable. The unexpected occurred today with semiconductors, financials and volatility all jumping into the bear camp during the final hour of trading. The bears are driving the bus, at least overnight into the Wednesday session tomorrow.

12/2/12; 7:00 PM EST EOM =

11/27/12; 3:56 PM EST = -29; signal line is -13; go short 1399; (Benchmark SPX for 2012 = +11.2%)(Keybot this trade = +2.1%; Keybot for 2012 = +22.4%)(Actual this trade = +3.6%; Actual for 2012 = +21.1%)

11/27/12; 3:55 PM EST = -13; signal line is -14

11/27/12; 2:20 PM EST = +3; signal line is -16

11/27/12; 12:46 PM EST = +19; signal line is -19

11/27/12; 12:12 PM EST = +3; signal line is -22

11/27/12; 11:53 AM EST = +19; signal line is -23

11/27/12; 10:02 AM EST = +3; signal line is -26

11/27/12; 10:00 AM EST = +19; signal line is -28

11/27/12; 9:44 AM EST = +19; signal line is -29

11/25/12; 7:00 PM EST = +3; signal line is -32

11/21/12; 12:38 PM EST = +3; signal line is -33

11/21/12; 10:31 AM EST = -13; signal line is -34

11/21/12; 10:00 AM EST = +3; signal line is -34

11/20/12; 3:54 PM EST = +3; signal line is -36

11/20/12; 1:55 PM EST = -13; signal line is -37

11/20/12; 1:12 PM EST = -29; signal line is -37

11/20/12; 1:08 PM EST = -13; signal line is -36

11/20/12; 11:12 AM EST = +3; signal line is -36

11/20/12; 10:55 AM EST = -13; signal line is -36

11/20/12; 10:30 AM EST = +3; signal line is -36

11/20/12; 9:00 AM EST = -13; signal line is -36

11/19/12; 3:59 PM EST = -13; signal line is -37

11/19/12; 10:43 AM EST = -29; signal line is -37

11/19/12; 10:33 AM EST = -45; signal line is -37 but algorithm says stay long

11/19/12; 9:30 AM EST = -29; signal line is -35; go long 1370; (Benchmark SPX for 2012 = +8.9%)(Keybot this trade = +5.0%; Keybot for 2012 = +20.3%)(Actual this trade = +8.9%; Actual for 2012 = +17.5%)