Sunday, July 10, 2016


Keybot the Quant is long moving into the new week of trading. Interestingly, on Friday, the rally gathered steam in the afternoon but copper could not catch a bid. As everyone celebrates, copper, a key to the economy, was the only asset flat to lower. This week begins with the algo number and signal line both at +68. How do you like that? The stock market is a toss-up. The model is teetering on a tight rope about to commit to one direction or the other.

The bulls need stronger copper and commodities to continue the upside stock market party. This  means that a weaker US dollar index is needed which will drive commodities, and stocks, higher. Watch copper in overnight trading since as copper goes, so goes the stock market. Bulls need JJC above 24.38, if so, new record stock market highs are guaranteed and the bulls begin the new week where they left off on Friday.

The bears need copper to remain weak and at the same time push the banks lower. Bank earnings are going to hit the tape starting with JPM mid-week. Bears need XLF under 22.77 to prove they have the beans to take stocks lower. If XLF  fails, and the SPX drops under 2107, Keybot will likely flip short, hence the imminent turn notation in the title line.

For the SPX starting at 2130 testing the all-time record highs, the bulls need to touch the 2132 handle and bingo, the upside will accelerate, copper will likely be heading higher and a bull party will begin the new week. The bears need to push under 2107 to accelerate the downside in equities. A move through 2108-2131 is sideways action to begin the week. The bulls have the ball but as the algo and signal line numbers show, both bulls and bears have their hands on the steering wheel as the bus careens down the boulevard.

Watch copper and financials to determine market direction. Bulls win with higher copper while bears win with weaker banks. Keybot prints one pre-scheduled number this week on Friday morning.

7/17/16; 7:00 PM EST =
7/15/16; 10:00 AM EST =
7/10/16; 7:00 PM EST = +68; signal line is +68 but algorithm remains long
7/8/16; 9:36 AM EST = +68; signal line is +67

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