Wednesday, December 3, 2014

STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is long for nearly seven weeks and did not print any numbers for a second day after Monday's wild ride. The projection remains repetitive. The algo is fixated on volatility and bears got nothing without VIX 14.48. Interestingly, the bulls likely need copper and/or commodities to create the next push higher and they appear less than enthusiastic. With the standoff, equities float sideways to sideways higher for another day with the SPX printing a new all-time high above 2076. If the VIX moves above 14.48, and SPX under 2067, Keybot will likely flip short.

For the SPX starting at 2074 on Thursday, the bulls need to push above 2076 and an upside acceleration will occur into the 2080's. The bears need to push under 2067 to accelerate the downside. A move through 2068-2075 is sideways action. Bulls only need a couple S&P points in the overnight futures and the rally party will continue for Thursday. Bears need higher volatility or they got nothing.

The ECB rate decision hits at 7:45 AM EST and the ECB press conference where President Draghi is expected to confirm that a full-blown QE program involving sovereign bond-buying will occur is 8:30 AM EST. S&P futures will react at both times but mainly in response to Draghi's press conference. If Draghi delivers the goods, then volatility stays low and bulls push equities higher. If Draghi fails to deliver the goods, then the VIX will jump wildly higher and stocks will sell off.

12/7/14; 7:00 PM EST =
12/5/14; 9:00 AM EST =
12/1/14; 1:03 PM EST = +58; signal line is +56

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