Tuesday, July 29, 2014


Keybot the Quant remains short but the bulls are running higher today. The bulls slap the bears in the face by pushing retail stocks higher. RTH is above 59.62 creating lift in the equity markets. Volatility remains low. The algo is now tracking semiconductors again as they stage a comeback. Watch SOX 623.15, now at 617.81 with a HOD at 620.51. Semi's remain in the bear camp under the critical SOX 623.15 bull-bear line in the sand so a lid is placed on the stock market upside. If bulls push SOX above 623.15, the stock market will catapult to new all-time highs. The bears need to push RTH under 59.62 and/or VIX above 12.69 to regain their mojo.

If the SOX moves above 623, and the SPX above 1985, Keybot will likely flip long. Thus, bulls need higher semiconductors and it is smooth sailing higher for equities. Bears need weaker retail stocks and/or higher volatility to reinitiate the downside market selling. Note the algo number is now only three points from the signal line verifying the continued bull-bear sideways struggle. The three parameters above will tell you who wins. The caution flag is out since bulls can start a big upside party if they simply goose the chip stocks.

7/31/14; 7:00 PM EST EOM =
7/29/14; 10:00 AM EST = +53; signal line is +56
7/29/14; 9:36 AM EST = +50; signal line is +57
7/28/14; 2:34 PM EST = +34; signal line is +58

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