STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains long moving into the Tuesday session. Volatility spiked higher (helping market bears) yesterday only to fall back (helping bulls) as it has for many times recently. At the same time, copper rose yesterday. The algo identifies three key parameters most affecting market direction; volatility, copper and commodities. Watch VIX 13.12, JJC 41.76, and GTX 4800, respectively. VIX is 13.02 creating market upside. JJC is 41.67 and GTX is 4760 creating market downside. The movement of these three parameters will dictate market direction.

The market bulls want the VIX to stay under 13.12 while moving JJC above 41.76 and/or GTX above 4800. If JJC moves above 41.76, the SPX will move well into the 1670's. If both JJC and GTX turn bullish the SPX is likely headed for the 1680's and much higher. The bears want to move the VIX above 13.12 to provide downside negativity for markets while at the same time maintaining the JJC and GTX bearishness. This action may begin more extended market selling moving forward.

For the SPX starting at 1666, the bulls need to touch the 1673 handle and it is off to the races higher with price moving towards 1680. The bears need to push under 1664 to create a downside acceleration.  A move through 1665-1672 is sideways action.  If the VIX moves above 13.12 and the SPX drops under 1664, it is likely that Keybot will flip short, hence the imminent turn notation in the title line. However, if JJC prints above 41.76, the bulls will likely maintain full control moving forward. At this writing, about four hours before the U.S. opening bell, copper is lower. Markets remain erratic and unstable.

5/26/13; 7:00 PM EST =

5/20/13; 10:24 AM EST = +46; signal line is +43