Wednesday, November 13, 2013

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

Keybot the Quant remains short. One day is stranger than the next. The SPX performs a melt-up this afternoon printing new highs but the algo motors along another day without printing any numbers. The SPX is now 36 points above where Keybot entered short, an unprecedented spread. In the 4+ years for the algo, there are only two times where the algo printed 30 to 32 points in the opposite direction. This is special market behavior currently and something has to give one way or the other, perhaps tomorrow. Of further interest is how copper collapsed today but it did not help the bears. Utilities are weak as well so the areas the bulls need to verify the upside path, copper, commodities and utilities, are all weak. At the same time, the bears could not gain any traction after the opening bell this morning since financials and volatility would not cooperate.

Watch UTIL 508.47, JJC 40.04, XLF 20.47 and VIX 14.10. Bulls need utes and copper. Bears need financials and volatility. If all 4 parameters remain in their respective camps, markets will move sideways although new all-time highs are printed today as these current key parameters refuse to budge. For the SPX for Thursday, that closed at the high at 1782, the bulls only need to see a smidge of green in the overnight futures and an upside acceleration is on tap into the mid-1780's. The bears need to keep the futures negative to stop the bleeding and after the SPX opens tomorrow, push price under 1761 to develop downside mojo, a formidable task. A move through 1762-1782 is sideways action. If utilities or copper turn bullish, and the SPX prints above 1782 and stays above, Keybot will likely flip long. The market action is the most bazaar of any action seen over the years for the algo. It will be interesting to see how it plays out. For now, the bears continue to drive the bus even though equities keep floating higher.

11/17/13; 7:00 PM EST =
11/10/13; 7:00 PM EST = +30; signal line is +42

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