STOCK MARKET BEARISH -- SHORT

Keybot the Quant is on the short side. The markets took the pipe yesterday with the Nasdaq dropping triple digits the biggest daily loss ever. A very serious market failure occurred yesterday afternoon with the NYA losing the 40-week MA at 9750. NYA is at 9741.58. Watch 9750.32. The market selling will stop if the bulls can send NYA above 9750. If the bears keep NYA under 9750, the market carnage will continue. The NYA 40-week MA cross is a very important market cyclical direction signal; above is a cyclical bull market; below is a cyclical bear market.

UTIL lost 506.57 and SOX lost 523.89 creating the majority of the stock market weakness yesterday. The weakness in semiconductors, which continues this morning, is very concerning for global markets. The bears will receive additional fuel if UTIL drops under the 50-week MA at 495.61. This failure opens a trap-door which will likely send equities into free fall.

For the SPX starting at 1742, the bulls need to retrace yesterdays downside move which is highly unlikely. Instead, the bulls soul focus is to move NYA above 9750 since all hope is lost if they cannot. The bears need to push the SPX only a couple points lower under 1740 to accelerate the downside. A move through 1741-1783 is sideways action today. The bears are cruising with the algo number 35 ticks under the signal line so the cation flag is removed, for now. If NYA moves above 9750, the caution flag may reappear since the bulls would be attempting a come back.

2/9/14; 7:00 PM EST =
2/7/14; 9:00 AM EST = 

2/3/14; 3:50 PM EST = -44; signal line is -9

2/3/14; 3:36 PM EST = -30; signal line is -6

2/3/14; 3:01 PM EST = -44; signal line is -4

2/3/14; 11:49 AM EST = -30; signal line is -1