Sunday, December 18, 2016


Keybot the Quant remains long heading into the new week of trading. The UTIL 656-657 level is extremely important over the coming days and will speak volumes about the intermediate term direction for the stock market ahead (weeks and months). UTIL begins the week at 657.72. The market bulls win going forward with Dow 20K and SPX 2300 if UTIL remains above 657 and moves higher. The market bears will win and stop the upside move in the stock market if they can push UTIL under 656.

If UTIL remains above 657, say, for at least seven minutes after Monday's opening bell, the algorithm will likely print a miraculous +100 number fully pegged into the ceiling with no other place to go. Keybot has never printed a +100 number.

The Keybot the Quant algorithm at its heart is an oscillator so the +80 and higher numbers can be thought of as a stock market that is overbot and the -80 to -100 level as oversold.

The bears are punched in the face day after day because volatility remains low. Central bankers maintain their jack boots on the throat of volatility. Bears need VIX above 13.92 (now at 12.20) if they want to growl significantly. The algo is starting to flag copper as a key parameter going forward. Watch JJC 28.20 (now at 29.33) since failure of this level would create downside for the stock market.

Thus, the bulls need UTIL to remain above 657 floating higher and keep volatility under 13.92 and they will be singing songs and drinking Fed wine as stocks print new all-time highs. The bears must immediately spank UTIL under 656. If UTIL loses 656, and the VIX moves above 13.92, and the SPX drops below 2254, Keybot will likely flip short, so caution is warranted.

For Monday with the SPX starting at 2258, the bulls need 10 points higher, to tag 2268, and the upside will accelerate well into the 2270's. The bears need to push 4 points lower below 2254 to accelerate the downside into the 2240's in a flash. A move through 2255-2267 is sideways action to begin the week.

US stock markets close early on Friday at 1 PM EST. Keybot prints one pre-schedulded number this week on Friday morning. The bulls are in control but pay attention to utilities and volatility, the UTIL 656-657 and VIX 13.92 levels, respectively, that will tell the stock market direction story early in the week.

12/25/16; 7:00 PM EST =
12/23/16; 10:00 AM EST =
12/18/16; 7:00 PM EST = +84; signal line is +63
12/16/16; 3:59 PM EST = +84; signal line is +62

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