Sunday, February 8, 2015

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long moving into the new week of trading. The erratic sawtooth action will probably continue. The bulls need volatility to drop with the VIX moving under 16.49 (now at 17.29) and it will be a big bull party on Monday. The bears need to either push SOX under 670.03 (now at 671.84 less than 2 points away) and/or XLF under 23.86 (now at 24.14) to create market mayhem. So listen for any potential news overnight about weakness or strength in semiconductor and financial stocks, respectively. If the status quo remains, with volatility in the bear camp and SOX and XLF in the bull camp, stocks will stagger sideways with a slight upward bias. If any of these three parameters flinch, you will immediately know the correct market direction ahead. If both the SOX and XLF turn bearish consider the imminent turn status to be in play and the algorithm preparing to flip back to the short side.

An interesting development is the weakness in utilities since Keybot is showing interest in UTIL 596.93. This number is valid for the entire week. If UTIL, now at 614, falls under 597, the stock market is in big trouble. Another level you want to know is UTIL 603 which will be applicable for all of the following week, the holiday-shortened week from 2/17/15 to 2/20/15. At 4 PM EST this coming Friday watch the UTIL (utilities index) since a close under 603 will indicate serious market trouble is on the way. A close above 603 will indicate bulls are fine.  If UTIL floats higher this week or remains stable moving sideways, the bulls will travel merrily along without any negative affects from utes.

For the SPX starting at 2055, the bulls need to push above 2072 to create an upside acceleration that will test 2075-2076 immediately. The bears need to push under 2050 that will accelerate price down to 2044-2046 in a heartbeat for a bounce or die decision. A move through 2051-2071 is sideways action to begin the week. Keybot prints one pre-scheduled number this week on Friday morning shortly after the opening bell. Markets remain erratic and unstable. The bulls are driving the rickety bus.

2/15/15; 7:00 PM EST =
2/13/15; 10:00 AM EST =
2/8/15; 7:00 PM EST = +56; signal line is +29
2/6/15; 12:15 PM EST = +56; signal line is +28

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