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

Keybot the Quant is bullish moving into the Thursday session with some drama on tap. Financials rocket higher and are firmly in the bull camp causing market lift. The big fight today was volatility; the VIX 13.98 bull-bear line in the sand. The bears kept the VIX above 13.98 the whole day, albeit a few minutes before lunch time, but in the closing minutes the bears folded like a cheap suit and the VIX turns bullish below 13.98 that will add a new up leg to equities. Or will it? The algo is very sly in the way it operates. Note how it keeps ratcheting up the signal line. Even though financials ran vertically and are now firmly bullish, a simple change of higher volatility (VIX back above 13.98) will place the algo in position to go short. Copper is a main factor causing market weakness currently.

Watch VIX 13.98 like a hawk; it determines the fate of markets. Bulls run equities higher if it stays under 13.98. If VIX moves above 13.98, the bears will be pushing equities lower and if the SPX loses 1871, and both these parameters remains bearish, Keybot will likely flip short. For the SPX starting at 1874, the bulls need to push up through 1876.50 and it is smooth sailing higher with the SPX above 1880 in a heartbeat. The bears need to push below 1871 to accelerate the downside. A move through 1872-1876 is sideways action. The bulls are steering the bus but the bears have their hands on the wheel as well and are trying to wrestle back control. VIX 13.98 and SPX 1871 will tell the market story on Thursday. If VIX stays under 13.98, bulls will be throwing confetti all day long.

3/7/14; 9:00 AM EST =

3/5/14; 3:55 PM EST = +62; signal line is +49

3/5/14; 11:19 AM EST = +48; signal line is +47

3/5/14; 11:07 AM EST = +62; signal line is +46

3/3/14; 12:18 PM EST = +48; signal line is +45