Thursday, October 9, 2014


Keybot the Quant is on the short side as the wild and epic week of trading continues into the Friday session. The algo did not print any further numbers today after the flip back to the short side. The retail, financial and utility sectors are identified by the algo as the key influences on market direction currently. Bulls need to push XLF above 23.11 or they got nothing. Bears need to push RTH under 62.13 or they got nothing. Equities will stumble sideways into the weekend if XLF stays under 23.11 and RTH stays above 62.13.

Monitor utilities tomorrow; the UTIL 554.27 bull-bear line in the sand that remains as a key parameter for every day next week. It does not come into play until the first second of Monday trading, however; at 4 PM EST tomorrow you will know where the UTIL price sits in relationship to 554.27 to begin next week. Price is 558.07 to begin Friday trading. If it closes here the bulls will receive upside juice come Monday. If UTIL closes under 554.27 tomorrow afternoon to end the week, losing about four points from current price, markets are going to tumble lower on Monday morning.

For the SPX for Friday starting at 1928, the bears only need a smidge of red in the futures and a downside acceleration will occur to test the strong 1924 in a heartbeat. If 1924 fails, a move to 1910-1912 is likely. The bulls are simply trying to stop the bleeding and will succeed if they can push the banks higher and move XLF above 23.11, otherwise, equities will float along sideways with a downward bias for Friday. If RTH 62.13 fails, markets will fall down the rabbit hole and SPX 1910-1912 is likely. A move through SPX 1928-1966 is sideways action to end the week. The bears have the ball again. Markets remain highly erratic and unstable as the historic and epic trading action continues.

10/12/14; 7:00 PM EST =
10/9/14; 11:54 AM EST = -23; signal line is -11; go short 1943; (Benchmark SPX for 2014 = +5.1%)(Keybot this trade = -1.0%; Keybot for 2014 = +6.7%)(Actual this trade = -0.9%; Actual for 2014 = +7.4%)

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