STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the markets melt upwards.  The behavior in copper is very interesting today since it moved the signal line higher and, despite the bullish euphoria today, sets the algo up for a potential reversal. The three parameters of greatest interest to Keybot right now that are determining market direction are copper, volatility and commodities. Copper and commodities are causing market bearishness while volatility is causing market bullishness. Watch JJC 41.93, VIX 13.74 and GTX 4810.

If JJC stays under 41.93, and VIX says under 13.74, and GTX stays under 4810, markets move sideways. If JJC moves above 41.93, and VIX remains under 13.74 and GTX moves above 4810, the bulls will be on their way to SPX 1640's. If JJC stays under 41.93, and VIX moves above 13.74, and GTX stays under 4810, the markets will sell off strongly. If the VIX moves above 13.74 and the SPX drops under 1623, it is likely that Keybot will flip to the short side.

For the SPX in the Thursday session starting at 1633, another new all-time high, the bulls only need to see a smidge of green in the futures overnight and an upside acceleration will occur to the high 1630's. The bears need to push under 1623 to accelerate the downside. A move through 1624-1632 is sideways action. Markets remain unstable. Exercise caution.

5/12/13; 7:00 PM EST =

5/8/13; 11:04 AM EST = +46; signal line is +33