STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 1963 this afternoon. The algo has been fixated on retail, financials and volatility and volatility, the VIX moving above 13.10 created the deterioration in equities, then RTH under 59.46 created more selling. The RTH closed exactly on Keybot's 59.46 bull-bear line in the sand. It is amazing how the algo can identify these key levels before they occur. RTH 59.46 will tell the story at the opening bell tomorrow; if RTH moves higher so do stocks; if RTH moves lower so do stocks.

The bulls can stop the selling with RTH above 59.46 and/or VIX below 13.10.  The bears can create further market deterioration with RTH under 59.46 and/or the XLF under 22.50. So the RTH pivot tells you who  wins tomorrow at the opening bell, then, if the bulls are recovering, VIX 13.10 determines how much. If the bears win with a lower RTH, then XLF 22.50 will determine if markets flush lower, or not. If RTH stays at 59.46 or lower (causing bearishness), and VIX above 13.10 (causing bearishness), and XLF above 22.50 (creating bullishness), like now, the markets will stagger sideways into the weekend.

The Keybot algorithm program gains about +4% on the last trade which ran for 8 weeks. The actual trading gains over +8%. Keybot exited the SSO trade and entered SDS for the short side move. The Keybot the Quant algorithm has provided an actual return this year thus far of +8% (+7.9%).

For the SPX for Friday starting at 1958, the bulls need to recover today's down draft to regain their mojo which is a formidable task so instead the bulls will force retail stocks higher and push RTH higher with all their might to stop the market selling. The bears only need to push the SPX under 1956, a couple points lower, to accelerate the downside to 1950. A move through 1957-1980 is sideways action to end the week. The bears finally took control of the steering wheel today as geopolitical events create fear spiking volatility wildly higher and sending equities lower. As always, stay alert for a whipsaw move. RTH 59.46 tells you the answer at the opening bell. Listen for any news concerning retail stocks. Keybot prints a pre-scheduled number tomorrow morning after trading begins.

7/20/14; 7:00 PM EST =

7/18/14; 10:00 AM EST =

7/17/14; 3:42 PM EST = +37; signal line is +63

7/17/14; 3:20 PM EST = +53; signal line is +64; go short 1963; (Benchmark SPX for 2014 = +6.2%)(Keybot this trade = +3.9%; Keybot for 2014 = +6.3%)(Actual this trade = +8.2%; Actual for 2014 = +7.9%)

7/17/14; 2:53 PM EST = +53; signal line is +64 but algorithm remains long

7/17/14; 9:00 AM EST = +67; signal line is +64

7/13/14; 7:00 PM EST = +67; signal line is +64

7/7/14; 10:53 AM EST = +67; signal line is +63

7/6/14; 7:00 PM EST = +81; signal line is +63

7/3/14; 9:00 AM EST = +81; signal line is +63

6/30/14; 7:00 PM EST EOM = +81; signal line is +63

6/29/14; 7:00 PM EST = +81; signal line is +63

6/27/14; 10:00 AM EST = +81; signal line is +62

6/24/14; 10:00 AM EST = +80; signal line is +62

6/22/14; 7:00 PM EST = +79; signal line is +62

6/20/14; 9:36 AM EST = +79; signal line is +62

6/17/14; 9:00 AM EST = +63; signal line is +61

6/16/14; 3:03 PM EST = +63; signal line is +61

6/16/14; 11:35 AM EST = +47; signal line is +60 but algorithm remains long

6/16/14; 9:44 AM EST = +63; signal line is +61

6/15/14; 7:00 PM EST = +47; signal line is +61 but algorithm remains long

6/13/14; 12:27 PM EST = +47; signal line is +60 but algorithm remains long

6/13/14; 10:42 AM EST = +63; signal line is +60

6/13/14; 10:00 AM EST = +47; signal line is +60 but algorithm remains long

6/13/14; 9:36 AM EST = +47; signal line is +60 but algorithm remains long

6/12/14; 3:53 PM EST = +63; signal line is +60

6/12/14; 3:29 PM EST = +47; signal line is +60 but algorithm remains long

6/8/14; 7:00 PM EST = +63; signal line is +60

6/6/14; 9:00 AM EST = +63; signal line is +59

6/5/14; 1:31 PM EST = +63; signal line is +58

6/5/14; 12:47 PM EST = +47; signal line is +57 but algorithm remains long

6/5/14; 12:25 PM EST = +63; signal line is +57

6/5/14; 12:07 PM EST = +47; signal line is +57 but algorithm remains long

6/5/14; 11:15 AM EST = +63; signal line is +57

6/5/14; 9:36 AM EST = +47; signal line is +58 but algorithm remains long

6/4/14; 9:36 AM EST = +63; signal line is +59

6/1/14; 7:00 PM EST EOM = +79; signal line is +59

5/30/14; 10:00 AM EST = +79; signal line is +59

5/29/14; 10:30 AM EST = +80; signal line is +58

5/27/14; 10:52 AM EST = +64; signal line is +57

5/27/14; 10:00 AM EST = +80; signal line is +57

5/27/14; 9:36 AM EST = +80; signal line is +56

5/25/14; 7:00 PM EST = +64; signal line is +56

5/22/14; 9:44 AM EST = +64; signal line is +55; go long 1889; (Benchmark SPX for 2014 = +2.2%)(Keybot this trade = -0.5%; Keybot for 2014 = +2.4%)(Actual this trade = -1.1%; Actual for 2014 = -0.3%)