STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is short overnight going into Tuesday, however, the algo is within one single hair of flipping long. The semiconductors were pumped by the bulls since that was the way to send markets higher. SOX moved from 419 to over 424 in the final two hours and Keybot's level of interest converged to the 424-ish level in the same time frame. The SOX level to watch is now at 423.90 and the final print today is 424.17 so the semi's are back in the bull camp and supplying upside energy. Keybot wants to go long and would have if the SOX would have crossed 423.90 a few minutes earlier, or, if the markets were open a few minutes longer. Thus, the drama will have to play out tomorrow.

VIX collapsed today from the 14.50 high to close at 13.19. VIX 14.42 is key tomorrow. XLF jumped higher to 18.21 well above the level of interest at 17.84. Keybot will likely flip long tomorrow if the SPX prints above 1563 after the opening bell.  The opening bell may be tricky, however, since a gap up opening would set a timer in motion and the flip to the long side may be delayed until around 11:00 AM.

For the SPX on Tuesday starting at 1563, if the overnight futures are green, Keybot will likely flip long unless a gap up occurs, which would create a delay. The bears need to keep the overnight futures red and push the SPX under 1549 to accelerate the downside. A move through 1550-1562 is sideways action. The bulls must keep SOX above 423.90, otherwise, Keybot will remain short.  Markets obviously remain extremely erratic and unstable. In a nutshell, SPX 1563 and SOX 423.90 determines if Keybot flips long tomorrow morning.

4/12/13; 10:00 AM EST =

4/8/13; 3:57 PM EST = +49; signal line is +40 but algorithm says stay short

4/8/13; 10:31 PM EST = +33; signal line is +40