Wednesday, October 1, 2014


Keybot the Quant remains short moving into the Thursday session. The month and quarter-end numbers print and remain as is with the algo number under the signal line and bears remaining in control of markets. Note how utilities fell on their sword yesterday. The bulls do not appear to have the strength to send utes higher, or volatility significantly lower, so the bears remain solidly in the driver's seat.

Watch semiconductors and financials; SOX 637.30 and XLF 23.06 are bull-bear lines in the sand identified by the algorithm. SOX begins at 638.48 only one point above the danger line. XLF is 23.17 only 11 pennies above the danger line. Failure with either parameter will create a strong leg lower for equities. If both fail, the SPX will be down 20 to 30 handles from current levels. If both remain in the bull camp, the bulls remain in the game and will be plotting a relief rally strategy for equities.

For the SPX starting at 1972, the bulls need to push above 1985 to accelerate the upside to 1988 and 1991. The bears need to push under 1969, only three points lower, to accelerate the downside to 1961-1966. A move through 1970-1984 is sideways action. S&P futures are -2 about three hours before the opening bell. The trading week heats up with the ECB Rate Decision and Press Conference on tap tomorrow morning and the Monthly Jobs Report in the States Friday morning. 

10/3/14; 9:00 AM EST =
9/30/14; 7:00 PM EST EOM EOQ3 = +23; signal line is +37
9/30/14; 10:00 AM EST = +23; signal line is +37

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