STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side today at SPX 2005 after an interesting start. Copper actually jumps into the bull camp and semiconductors soar higher but utilities, retail and volatility created negativity and pushed the algo to the short side. Volatility recovers in the final minutes of trading.

The bull-bear battle continues with the algo number only 6 points under the signal line. Stay alert for a whipsaw move back to the long side. If UTIL moves above 589.27 and the SPX moves above 2010, Keybot will likely flip back to the long side but probably only if this occurs after 1 PM EST tomorrow.

The market bears need either VIX above 18.04 or JJC under 28.04 to create selling in the stock market. The VIX begins at 17.96 only 8 pennies in the bull camp (18.03 after the late settlement so it sits directly on the bull-bear level and will pivot one way or the other when the opening bell rings; as volatility goes, the stock market will move in the opposite direction). So bulls need higher utilities, UTIL above 589.27 while the bears need higher volatility, VIX above 18.04. One of these two will likely flinch in Thursday trading.

For the SPX starting at 1994, the bulls need to push above 2010 to regain their mojo, a formidable task, so the bulls will instead focus on pushing utilities higher. The bears need to push the SPX under 1991 to accelerate the downside. A move through 1992-2009 is sideways action for Thursday.

On the last trade, the algorithm program gains about +4% and SSO gains about +8%. The SPX benchmark index is down about -3% this year (SPX 2005 is 54 points below the starting year number at 2059). The Keybot the Quant algorithm actual trading this year is up over +15% creating an 18% spread compared to the benchmark. During the last trade, the model ran from SPX 1929 to 2005; one heck of a rally; 76 handles. The algo exits SSO and enters SDS still using 2x leveraged ETF's. The bears are driving  the bus but the markets remain erratic and unstable. Watch utilities and volatility.

10/18/15; 7:00 PM EST =

10/16/15; 10:00 AM EST =

10/14/15; 3:43 PM EST = +3; signal line is +9

10/14/15; 12:54 PM EST = -11; signal line is +9; go short 2005; (Benchmark SPX for 2015 = -2.6%)(Keybot algo this trade = +3.9%; Keybot algo for 2015 = +9.7%)(Actual results this trade = +8.1%; Actual results for 2015 = +15.4%)

10/14/15; 11:17 AM EST = -11; signal line is +9 but algorithm remains long

10/14/15; 10:46 AM EST = +5; signal line is +9 but algorithm remains long

10/14/15; 10:44 AM EST = +19; signal line is +9

10/14/15; 10:25 AM EST = +35; signal line is +8

10/14/15; 9:36 AM EST = +19; signal line is +6

10/13/15; 12:57 PM EST = +3; signal line is +4 but algorithm remains long

10/13/15; 11:55 AM EST = +19; signal line is +3

10/13/15; 11:33 AM EST = +35; signal line is +2

10/12/15; 1:50 PM EST = +19; signal line is 0

10/12/15; 11:16 AM EST = +35; signal line is -2

10/12/15; 10:56 AM EST = +19; signal line is -4

10/12/15; 10:16 AM EST = +35; signal line is -6

10/11/15; 7:00 PM EST = +19; signal line is -9

10/9/15; 2:31 PM EST = +19; signal line is -11

10/9/15; 12:10 PM EST = +5; signal line is -14

10/9/15; 10:13 AM EST = +19; signal line is -15

10/9/15; 9:36 AM EST = +35; signal line is -18

10/8/15; 3:58 PM EST = +19; signal line is -21

10/8/15; 3:40 PM EST = +3; signal line is -24

10/8/15; 3:16 PM EST = +19; signal line is -26

10/8/15; 2:37 PM EST = +3; signal line is -28

10/8/15; 11:12 AM EST = -27; signal line is -30

10/8/15; 10:42 AM EST = -11; signal line is -31

10/8/15; 10:17 AM EST = -27; signal line is -32

10/8/15; 10:02 AM EST = -11; signal line is -33

10/7/15; 10:40 AM EST = -27; signal line is -34

10/7/15; 10:22 AM EST = -11; signal line is -36

10/7/15; 10:12 AM EST = +5; signal line is -37

10/7/15; 10:02 AM EST = -11; signal line is -39

10/7/15; 9:52 AM EST = +5; signal line is -40

10/7/15; 9:36 AM EST = -11; signal line is -42

10/6/15; 2:11 PM EST = -27; signal line is -43

10/6/15; 10:53 AM EST = -43; signal line is -44

10/6/15; 10:16 AM EST = -27; signal line is -44

10/5/15; 11:12 AM EST = -11; signal line is -46

10/5/15; 10:51 AM EST = -27; signal line is -46

10/5/15; 10:27 AM EST = -11; signal line is -46

10/5/15; 9:36 AM EST = -27; signal line is -47

10/4/15; 7:00 PM EST = -43; signal line is -47

10/2/15; 12:54 PM EST = -43; signal line is -47; go long 1929; (Benchmark SPX for 2015 = -6.3%)(Keybot algo this trade = +1.8%; Keybot algo for 2015 = +5.8%)(Actual results this trade = +3.1%; Actual results for 2015 = +7.3%)