Thursday, January 1, 2015

SPX Daily Chart Shows Keybot the Quant Algorithm Turns in 2014

The SPX daily chart shows the Keybot the Quant algorithm turns during 2014. The algo flipped sides 32 times last year about once every week and one-half. This is slightly more than would be expected; typically a move about once every two weeks, or about 26 turns would be expected. The market had a few bouts with sideways action that created whipsaws in late February, late April and early October. Note the long periods where the algo remained committed to the direction such as the bear side in January, the bull side from late May into July, a bull run in August, a bear move from late September into October and the bull move from October into early December.

The algo currently remains long to begin the new year of trading and is tracking NYA 10780. Market bulls are fine if NYA stays above 10780. If NYA loses 10780, Keybot will likely flip to the short side and extended selling would be underway.

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