Tuesday, December 27, 2016


Keybot the Quant remains long as thin trading provides market drama. The algo dropped like a stone at the opening bell as utilities faltered, but the bears were not strong enough to stop the upside rally. Keybot was champing at the bit to go short but the internal programming rules would not allow the move and the algo remains bullish but only by a slim 2 points.

Market bulls need higher utes, retail stocks and copper for Dow 20K and SPX 2300 to print. Market bears need UTIL to drop under 660.10 (now at 661) and SPX to drop under 2266 and Keybot will likely flip short. Bears benefit from lower utes, retail stocks and copper.

For the SPX starting hump day at 2269, the bulls need to touch the 2274 handle and bingo, the upside will accelerate above 2280 in a flash. The bears need to push below 2266 to accelerate the downside. A move through 2267-2273 is sideways for Wednesday.

The bulls remain in control but they can only be the king of the hill for so long. The rocks and soil below their hooves is starting to loosen and give way. Bears need UTIL under 660 and SPX under 2266 so they can throw confetti. If not, the bulls will win, the algo will remain long, and the Dow will likely float higher to 20K.

1/1/17; 7:00 PM EST EOM; EOQ4; EOH2; EOY =  
12/27/16; 12:52 PM EST = +84; signal line is +82
12/27/16; 10:00 AM EST = +68; signal line is +81 but algorithm remains long
12/27/16; 9:36 AM EST = +68; signal line is +80 but algorithm remains long
12/25/16; 7:00 PM EST = +100; signal line is +80

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