Wednesday, November 5, 2014


Keybot the Quant remains long moving into the Thursday session. The algo has not printed any numbers as yet this week. It is interesting how sometimes the algo may go crazy and print one dozen numbers in one day and then go several days without printing any numbers. The fight continues with volatility and copper determining if the stock market moves higher, or not. Note that for the stock rally today, the VIX did not drop under 14.10 so the upside is not a done deal.

Watch VIX 14.10 and JJC 37.02 as the two bull-bear lines in the sand. Both are bearish and will create a ceiling in the stock market. The bulls will launch a new leg higher in the stock market if the VIX drops under 14.10 or if the JJC moves above 37.02. Until then the bulls got nothing. VIX begins at 14.17 only pennies away creating high drama after Thursday's opening bell.

For the SPX starting at 2024, the bulls need any smidge of positivity in the overnight S&P futures and bingo, new all-time highs and a move to 2030 is on the table. If this occurs the VIX will likely drop under 14.10 and more equity upside will be locked in. The bears must keep the overnight futures negative with all their might. Of interest will be 7:45 AM EST since the ECB decision occurs and then 8:30 AM EST when ECB president Draghi speaks. Futures will respond to these time inflection points.

The bears need the SPX to drop under 2015 to create a downside acceleration. A move through 2016-2024 is sideways action. In addition to the S&P futures, watch copper in overnight trading since the stock market will likely move in the same direction as copper.

After the opening bell, watch VIX 14.10 since it tells you if any market rally is real and has legs, or not. If VIX falls under 14.10 a big bull rally party continues. Bears will be happy creating a ceiling in the stock market if they maintain VIX above 14.10.

11/7/14; 9:00 AM EST =
11/2/14; 7:00 PM EST EOM = +46; signal line is +28

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