Wednesday, November 14, 2012


Keybot the Quant is short ahead of the Thursday session.  The selling was strong today with two key levels giving way as described; SPX 1369 and NYA 8000.  Keybot was wildly printing numbers late morning so it was easier to let the smoke clear before updating. It is obvious that the algo would be staying short today.  The algo number is at -74, a very low number and for an oscillator, think of this as an indication of oversold conditions.  Looking back, you can study the data in the archives, the market bottoms in October and November 2011 occurred with the -70's prints.  Interestingly, the November 2011 action occurred in this same time frame. The markets dropped into Thanksgiving, even the half session Friday, which would be seven days from now, then the markets rallied on the Monday following Thanksgiving.  In October 2011, Keybot printed the low -70's numbers the first few days of the month which identified that bottom.  Thus, both market bottoms last Fall were identifed by the -70's prints and the market bottom occurred from zero to within three days of the first -70's print.  In other words if the October and November fractals play out the same way now, the markets likely either bottomed today, or will bottom tomorrow or Friday, and by Monday, Keybot will likely flip long to signal a rally. Stay very alert.  The caution flag, however, was removed since the bears have driven markets strongly negative today.

Watch VIX 16, NYA 8000 and SPX 1369 for any signs of life by bulls. For the SPX starting at 1355, the bears only need to push under 1352.50 and the downside selling will accelerate with the SPX on its way to 1345.  The bulls are simply trying to stop the bleeding and that will begin by preventing the SPX from falling under 1353.  A move thru 1353-1375 is sideways action. The bears are in firm control but the markets are likely going to print a bottom over the next one to three days, so stay nimble. Remember, Keybot is not designed to catch the exact market bottoms or tops, it takes the smoothest path thru the year, thus, the markets will likely spike off the bottom perhaps as much as ten handles or more before Keybot likely flips to the long side. If trading the markets, you must be married to your mouse for the next three days since it appears that a market bottom may occur at anytime as this week plays out.

11/18/12; 7:00 PM EST =
11/14/12; 12:12 PM EST = -74; signal line is -31
11/14/12; 11:34 AM EST = -60; signal line is -29
11/14/12; 11:24 AM EST = -74; signal line is -26
11/14/12; 11:08 AM EST = -60; signal line is -24
11/14/12; 10:45 AM EST = -74; signal line is -22
11/14/12; 10:28 AM EST = -60; signal line is -20
11/11/12; 7:00 PM EST = -46; signal line is -18

1 comment:

  1. Stock market is going down after the reelection of Obama as president again. Peoples are hoping that to improve economy in the coming days & stock market will move upward.

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