Friday, August 26, 2016


Keybot the Quant remains long moving into the Friday session. Fed Chair Yellen will begin speaking in Jackson Hole in 90 minutes one-half hour after the opening bell. That is also when Keybot prints a pre-scheduled number for this week.

Retail stocks collapsed yesterday. The dollar stores were beaten like a rented mule. Amazingly, RTH drops to 79.53 exactly at the 79.53 line in the sand that the quant identifies. As retail stocks go, so goes the markets. If RTH drops below 79.53, and the SPX drops under 2170, Keybot will likely flip short. GTX under 2271 (note how GTX came down to test this level yesterday and bounced telling you that the bears did not have enough juice; Keybot is a smart robot) and VIX above 14.50 will also benefit the market bears. If RTH remains above 79.53, bulls are fine and stocks should float sideways to sideways higher.

For the SPX starting at 2172, the bulls need to push above 2179 and bingo, stocks will accelerate well into the 2180's. The bears need only 2 points lower, to push under 2170, and the downside will accelerate to the low to mid 2160's in a flash. A move through 2171-2178 is sideways action.

All eyes are watching Fed Chair Yellen. Watch RTH 79.53 and SPX 2170 to assess stock market direction.

8/28/16; 7:00 PM EST =
8/26/16; 10:00 AM EST =
8/22/16; 9:36 AM EST = +78; signal line is +77

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