Thursday, July 10, 2014


Keybot the Quant remains long moving into the Thursday session that is projected to be a gap down opening with the S&P futures at -17. The algo is tracking three key sectors that are most greatly impacting stock market direction; retail, volatility and financials. The markets are set to sell off but the bears can only create extended downside with RTH 59.34, VIX 13.15 and/or XLF 22.46. In other words, as the markets sell off, if the bears do not attain at least one of these three goals, they got nothing, and the broad indexes will recover.

If any one of the three parameters turn bearish, and the SPX drops under 1965 (which is set to occur for the SPX), Keybot will likely flip short. However, pay close attention to the low prints today in the SPX since the algo uses these data points as one of the internal programming rules to determine if the flip to the short side will occur, or not. If stocks recover today but one of the three parameters turn bearish, the SPX will need to take out the lows of the day to potentially flip short.

For the SPX starting at 1973, the bulls only need one point higher, to 1974, and an upside acceleration will occur. This is not going to happen at least in the early going. The bears need to push under 1965, which already looks like a done deal considering the S&P futures, which accelerates the downside to 1960. The imminent turn notation is in the title line since the market bears are mounting a charge today. Watch retail, volatility and financials as described above since they will tell you if the market downside is real, or not.

7/13/14; 7:00 PM EST =
7/7/14; 10:53 AM EST = +67; signal line is +63

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