Tuesday, September 9, 2014


Keybot the Quant remains short. The algo idled along without printing any numbers but the fix was in for the bear side when copper collapsed. Copper took the pipe and is now firmly entrenched in the bear camp wanting to see lower equities going forward. The algo is now tracking volatility and financials as the key market movers and is also showing developing attention with utilities. Watch XLF 22.92 (now at 23.23 causing market upside) and VIX 12.34 (now at 12.91 causing market downside). Bears need XLF under 22.92 to create a firm flush lower for stocks. The bulls need VIX under 12.34 to stop the market selling and begin a recovery move. If VIX drops under 12.34 and the SPX moves above 2001, Keybot will likely flip long, easily doable in these erratic markets, but difficult, so the imminent turn notation is removed. If volatility drops, consider the imminent turn notation to be back in place since the bulls will be pushing equities higher.

For utilities, watch UTIL 545 for the remaining three days this week and starting 4 PM EST on Friday afternoon, watch UTIL 550 all through next week. UTIL drops to 557 today. Utilities are causing market bullishness but that changes if UTIL 545 fails this week, which is somewhat unlikely, but big trouble occurs for markets next week if UTIL 550 fails, so write this number down and monitor it all next week.

For the SPX starting at 1988 support on Wednesday, the bulls need to touch the 2001 handle to accelerate the upside. The bears need to push under 1985 to accelerate the downside. A move through 1986-2000 is sideways action. Bulls need lower volatility to stop the bleeding. Bears need lower financials to create more selling.

9/12/14; 10:00 AM EST =
9/8/14; 11:57 AM EST = +40; signal line is +53

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