Keybot the Quant is short to begin the new year. Utilities and volatility will dictate market direction today. The bears came within 13 pennies of opening the UTIL 482.19 trap-door for markets but the bulls saved the day again, just like in 2013. Watch UTIL 482.19 and VIX 14.12. Very simply, if VIX drops under 14.12, the bulls will stage a recovery rally today and into the weekend. If VIX stays above 14.12, and UTIL 482.19 fails, the trap-door opens and a drop of 20 to 30 handles in the SPX in quick order would not at all be surprising. Market mayhem is expected if UTIL 482.19 fails.
For the SPX starting at 1832, the bulls need to touch the 1846 handle and the upside party will begin again. The bears need to push under 1828 to accelerate the downside. A move through 1829-1845 is sideways action. S&P futures are +3 at this writing about an hour or so in front of the opening bell. This hints at a sidways stutter to start the day. The bears are driving the bus. If the bulls can keep utes elevated, push VIX under 14.12, and push the SPX above 1846, Keybot would likely flip long.
1/5/14;
7:00 PM EST =
1/2/14; 11:40 AM EST
= +35; signal line is +41
1/2/14;
10:58 AM EST = +49; signal line is +41 but algorithm remains short
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