Tuesday, December 20, 2016


An epic event occurs yesterday for the Keybot the Quant algorithm. The algo has been recording its data since November 2008 when the stock market was sliding lower during the financial crisis and has never printed a +100 number in its history. Yesterday, Keybot prints +100. The algo is an oscillator that has a minimum reading of -100 and maximum at +100. It is astounding and amazing that the model is pegged into the ceiling at +100. The algo can no longer move any higher; it represents a maximum overbot condition in the stock market. The week is off to a robust start with Keybot printing eight numbers.

Utilities move higher creating more bull fuel for equities. Watch the key levels at UTIL 658.55 and 656.19. UTIL is at 659.62 above both parameters so the stock bulls run higher. The market bears need to push  UTIL under one or both of these levels asap. If not, SPX 2300 and Dow 20K are on the way.

Copper drops yesterday to test the level the algorithm called out yesterday for JJC. Watch JJC 28.32 as a key bull-bear line in the sand. JJC is at 28.63. Bears will  receive downside juice to send stocks lower if copper fails. Bears receive daily beatings due to low volatility. Bears need VIX above 13.92 (now at 11.71) to prove that they can take the stock market substantially lower.

For the SPX starting at 2263, the bulls need 5 points higher to move above 2267 and price will accelerate above 2270 in quick order. The bears need to push below 2258 to accelerate the downside. A move through 2259-2266 is sideways action for Tuesday. S&P futures are up +5 a couple hours before the opening bell as this is typed.

UTIL 658.55 and 656.19, and JJC 28.32 tell the market direction story. If all three parameters remain bullish with price above, Dow 20K and SPX 2300 are imminent. If any of the three fail, stocks will retreat. Interestingly, if both key utility levels fail, and the SPX drops under 2258, Keybot will likely flip short. Utilities and copper will determine the fate of the bulls or bears ahead. Copper is down marginally in overnight trading.

12/25/16; 7:00 PM EST =
12/23/16; 10:00 AM EST =
12/19/16; 3:39 PM EST = +100; signal line is +71
12/19/16; 3:00 PM EST = +84; signal line is +69
12/19/16; 12:04 PM EST = +100; signal line is +69
12/19/16; 11:24 AM EST = +84; signal line is +67
12/19/16; 10:48 AM EST = +68; signal line is +66
12/19/16; 9:57 AM EST = +84; signal line is +66
12/19/16; 9:47 AM EST = +100; signal line is +65
12/19/16; 9:36 AM EST = +84; signal line is +64
12/18/16; 7:00 PM EST = +84; signal line is +63

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.