Wednesday, October 15, 2014


Keybot the Quant remains bearish. The bulls were bludgeoned today but did stage a comeback late in the day. The algo motored along all day and did not print any numbers. The algo is tracking UTIL 554.27 and SPX 1893 as the two top priorities in this circus type market. UTIL 554.27 is important for the next two days and then for the two following weeks UTIL 559-ish is key. This sets up an interesting path forward. It is amazing how the algo always identifies interesting things to watch.

The current price for UTIL is 558.64 four points above the bull-bear danger line at 554.27 but note that for the two following weeks price is under the 559-ish. This means the utilities will create market weakness next week and moving forward. So not only watch the UTIL 554.27 today and tomorrow but be aware of where price is in relation to 559-ish. If UTIL drops lower, especially under 554.27, markets take another big leg lower. If UTIL remains steady and floats higher and ends the week above 559-ish it will be all systems go for the bulls next week.

Bulls will create a sustainable rally if they can move SPX above 1893. Bulls got absolutely nothing if they cannot move above SPX 1893. For the SPX starting at 1862, the bulls need to touch the 1874 handle and bingo, the upside will accelerate. The bears need to push under 1821 to regain their mojo, a formidable task, so instead bears will try to beat the utility stocks lower. A move through SPX 1922-1873 is sideways action for Thursday. The circus continues. Utilities are important and they typically move with rates. So higher yields should weaken UTIL and lower yields should send UTIL higher so this will give you a heads-up overnight if you watch what direction rates are moving in.

10/19/14; 7:00 PM EST =
10/17/14; 10:00 AM EST =
10/17/14; 9:00 AM EST =
10/14/14; 12:56 PM EST = -37; signal line is -12
10/14/14; 12:24 PM EST = -21; signal line is -11

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