Thursday, September 25, 2014


Keybot the Quant remains short as the market push and pull continues. The bulls stage a 22-handle intraday turnaround for the SPX yesterday. The algo has not printed any numbers since the flip to the bear side on Monday. The key parameter currently impacting market direction remains volatility. Watch VIX 12.36. The VIX is at 13.27 in bear territory causing market negativity. Bears are fine as long as the VIX does not drop under 12.36. Bulls win the day if volatility drops. If the VIX falls under 12.36 and the SPX is printing above 2000, Keybot will likely flip long. If the stock market rallies but the VIX stays above 12.36, equities will run out of gas and reverse and move lower.

For the SPX starting at 1998, the bulls only need a couple points, to touch the 2000 handle, and bingo, price will immediately tag the 2002-2003 resistance and likely punch up through. The bears need to retrace yesterday's move and push below 1979 to regain their mojo so instead will focus on pushing volatility higher. A move through 1980-1999 is sideways action. The bears are driving the bus but the markets remain in this ongoing choppy sideways bull-bear fight for control.

9/26/14; 10:00 AM EST =
9/22/14; 9:36 AM EST = +42; signal line is +42; go short 2004; (Benchmark SPX for 2014 = +8.4%)(Keybot this trade = -0.1%; Keybot for 2014 = +8.0%)(Actual this trade = +0.0%; Actual for 2014 = +9.3%)

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