Friday, August 29, 2014


Keybot the Quant remains long after teasing a move to the short side yesterday. The battle between copper and volatility continues. Bears champion copper with JJC below 38.79 causing market negativity. Bulls wave the volatility banner with the VIX remaining under 12.54 creating market bullishness. One of these two parameters will flinch and dictate the path for ward for equities. Bears win with higher volatility. Bulls win with higher copper. VIX is printing at 12.34 as this is typed only 20 cents away from the bull-bear line in the sand.

The bulls needed to push the SPX above 1998 to create an upside acceleration which occurred with the SPX HOD at 2001.35. The SPX is now printing at 1996.24. The bears can create a downside acceleration if the 1991 support is lost. Note that both copper and volatility were in the bear camp early yesterday and Keybot was in position to flip short (the algo number was at +40 nine points below the signal line at +49) but the internal programming rules would not latch to allow the move, hence, the bulls keep driving the bus. If the VIX moves only 20 cents higher, to 12.54 and higher, and remains above, Keybot will likely flip short. The algo prints the pre-scheduled number a few minutes ago resulting in a one point bump higher for the signal line. Only three points separate the algo number and signal line, hence the imminent turn status is in the title line. Caution is required moving forward.

8/31/14; 7:00 PM EST EOM =
8/29/14; 10:00 AM EST = +54; signal line is +51
8/28/14; 10:00 AM EST = +54; signal line is +50
8/28/14; 9:45 AM EST = +40; signal line is +49 but algorithm remains long
8/28/14; 9:36 AM EST = +54; signal line is +48
8/27/14; 3:47 PM EST = +70; signal line is +47

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