Friday, November 25, 2016


Keybot the Quant remains long. The shortened Friday trading session is set to begin in about three hours. The bulls are cruising with the algo number 33 points above the signal line. The market bulls need higher utility stocks (UTIL above 653) to keep the upside rally going. The bears need higher volatility (VIX above 13.85) and lower commodities (GTX under 2249) to send stocks lower.

Note how GTX came down to test the 2250-ish level called out by the algorithm on both Tuesday and Wednesday but it would not fail. The bulls slapped the bears. Slap, slap. If volatility or commodities turn bearish, you will know the upside equity rally is over. If both turn bearish, the bears will begin growling strongly with stocks falling in earnest. If stocks pull back due to one of the two parameters turning bearish, but then the parameter recovers back to the bull side, then stocks would resume the uptrend.

For the SPX starting Friday at 2205, the bulls need any smidge of positivity in the S&P futures and price will accelerate several handles higher after the opening bell to new all-time highs. S&P futures are +3 as this message is typed. The bears need to push the SPX below 2195 to regain their mojo. A move through 2196-2204 is sideways action.

Today (day after Thanksgiving) is an extremely bullish day for stocks over the last few decades so it will be interesting to see if the Trump Rally can continue with the help of the positive seasonality, or not. Stocks have rallied since 11/7/16; a day before the US presidential election. The stock market closes at 1 PM EST (6 PM London) and full trading sessions begin again on Monday.

11/27/16; 7:00 PM EST =
11/23/16; 10:00 AM EST = +65; signal line is +32
11/21/16; 10:30 AM EST = +62; signal line is +30

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