Saturday, July 19, 2014


Keybot the Quant remains short through the weekend which has not occurred since May. Despite the big upside bull rally recovery, the algo idles along remaining bearish. If the SPX would have gained a couple more points, Keybot would probably be long now. Monday's opening will be very important.

The wild spike higher in volatility on Thursday afternoon (VIX above the algo's 13.06 bull-bear level) created the flush lower in equities then the collapse in volatility under VIX 13.06 on Friday catapulted the stock market bulls to greatness again. The VIX giveth to bears and taketh away.

The algo identifies copper and volatility as the current market direction drivers to begin next week. Watch for any copper weakness which currently appears to be the best chance for the market bears to create selling pressure. A drop in copper of only about -0.8% should be enough to lock in stock market downside. So if you see copper trading negatively overnight into Monday the bears are coming to play and are at least going to make upside gains difficult. If copper is trading positively, the bears got nothing and will likely fold like a cheap suit with Keybot likely flipping to the long side.

Key levels and other algo information can be identified once the Sunday pre-scheduled number prints. The bears are driving the bus but the bulls have their hands on the steering wheel as well. Keybot is champing at the bit to go long but the internal programming rules will not yet permit the move.

7/20/14; 7:00 PM EST =
7/18/14; 10:58 AM EST = +66; signal line is +63 but algorithm remains short

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