Monday, July 28, 2014


Keybot the Quant remains short as the new trading week is underway. The bears come to play turning both the retail sector and volatility bearish, while maintaining weak semiconductors, so equities fall. The algo begins the week by printing two numbers verifying a weaker picture for the stock market ahead. The algo number is now 42 points below the signal line. Surprisingly, the SPX is now printing only 2 or 3 points lower when for this failure a 20 plus point failure would be expected.

Watch RTH 59.62 (causing market negativity), VIX 12.70 (causing market negativity) and XLF 22.63 (causing bullishness). Thus, bulls need either RTH above 59.62 and/or VIX under 12.70 to stop the market selling. Bears need XLF under 22.63 to drive markets lower. Since RTH price is 59.58 only four pennies away use this as the main market driver of direction right now.

Equities will recover with RTH above 59.62. Instead, if the RTH price action is a simple back kiss, and the RTH resumes the path lower, equities will start to tumble lower in earnest. The bears are in firm control with the bulls sitting in the back seat of the bus. Keybot prints four pre-scheduled numbers this week; one tomorrow morning, the second on Thursday for the month-end and two on Friday morning. It is very surprising that the stock market is not far lower.

8/3/14; 7:00 PM EST =
8/1/14; 10:00 AM EST = 
8/1/14; 9:00 AM EST =
7/31/14; 7:00 PM EST EOM =
7/29/14; 10:00 AM EST =
7/28/14; 9:48 AM EST = +20; signal line is +62
7/28/14; 9:36 AM EST = +36; signal line is +63
7/27/14; 7:00 PM EST = +50; signal line is +64

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