Sunday, July 31, 2016


Keybot the Quant remains long moving into the new week of trading. The algorithm has not printed any numbers (except for the pre-scheduled numbers) for 10 trading days (two weeks) which verifies the tight sideways move in stocks. This behavior is record-setting for the algo. Keybot has never went this long without printing a number during trading hours ever in its 8-year history. What will happen? Who knows? Markets appear to be in uncharted waters.

Bulls need GTX, commodities, above 2283 to guarantee sustainable upside in stocks. Bears need JJC, copper, under 24.87, to flush the stock market lower. VIX above 15 will also help the bears. These parameters have stumbled sideways without changing status over the last week or so which sends the stock market sideways. Since commodities and copper are directly impacted by the US dollar index, the move in the buck will likely dictate the direction in stocks; it is a battle between copper and the general commodities complex.

For the SPX starting at 2174 on Monday morning, the bulls need to push above 2177, which is the all-time record high in history, and stocks will accelerate higher beginning the week with a bull party. Look for three positive points in the S&P futures overnight to see if the bulls have the strength. The bears need to push the SPX under 2163 and boom, stocks will accelerate lower. If JJC or VIX turns bearish in conjunction with SPX under 2163, Keybot will likely flip short. The SPX moving through 2164-2176 is sideways action to begin the week.

Monday is the first day of trading for August. Keybot prints one pre-scheduled number this week on Friday morning before the opening bell. Watch copper trading overnight as another hint on broad market direction for Monday.

8/7/16; 7:00 PM EST =
8/5/16; 9:00 AM EST =
7/31/16; 7:00 PM EST EOM = +79; signal line is +75
7/29/16; 10:00 AM EST = +79; signal line is +74

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