Tuesday, August 5, 2014


Keybot the Quant remains short moving into the Tuesday session. The algo is identifying the retail sector as the key market directional determinant today with financials and utlities also important. Watch RTH 59.50-59.51. Price is 59.49 only one penny away; it is always amazing to see the price action seek the algorithms numbers of interest which act as magnets. The relief rally continues far higher if the bulls push RTH above 59.51. Bears will maintain a lid on the market upside if RTH stays under 59.50. Check RTH at the opening bell to see who wins.

Watch XLF 22.55 (now at 22.40 causing markt negativity). Bulls need XLF 22.55 and higher to create upside market fuel. Also watch utilities. UTIL is 539 well under this week's level of interest at 551.66 giving a green light to bears, however, for next week, this bull-bear line in the sand drops to UTIL 543.81. Write this number down since it is very important moving into trading later this week and on Monday. Bears must keep UTIL under 543.81 for the next nine trading days to maintain downside selling pressure in equities. Bulls will recover if UTIL moves above 543.81; this number will not mean as much over the next couple days but will rule the roost come Friday and all of next week.

For the SPX for Tuesday starting at 1939, the bulls need to move above 1943, four points higher, to create an upside acceleration. The bears need to push under 1921, retracing yesterday's move, to regain downside mojo. A move through 1922-1942 is sideways action for Tuesday. The bears continue to cruise as the relief rally move sorts itself out. The RTH 59.51 bull-bear line in the sand will dictate market direction so listen closely for any news concerning retailers.

8/10/14; 7:00 PM EST =
8/3/14; 7:00 PM EST = -9; signal line is +30

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