Sunday, January 29, 2017


Keybot the Quant is long as the new week of trading begins but the algo wants to go short. The algo number is 14 points below the signal line. If the SPX drops under 2292, Keybot will likely flip short, however, the market bears need a gentle move lower. If stocks gap down at the opening bell, the model may trigger a timer that will hold off the move to the short side for 90 minutes.

Retail stocks and utilities are the two sectors most impacting broad stock market direction currently. Watch RTH 76.60 now at 76.10 creating negativity in stocks. Bears must maintain the RTH under 76.60 while the bulls will be trying to push above 76.60 which will kick the stock market rally back into gear.

UTIL begins the week at 657.70. Bears need UTIL under 655.00 which will cause stocks to take a leg lower. Bulls need UTIL above 664.10 which will create bullishness in stocks. If UTIL remains between 655 and 664, and RTH under 76.60, stocks will stagger along sideways.

For the SPX starting at 2295, the bulls need to push above 2299 and bingo, price will be running towards 2305 very quickly. The bears need to push under 2292 and price will collapse to the low 2280's in quick order. A move through 2293-2298 is sideways action for Monday.

The bulls are hanging on by a thread and desperately need either RTH above 76.60 or UTIL above 664.10 to keep the stock market rally going. The longer that prices stay below these levels, the increased likelihood that stocks will roll over to  the downside. The algo also identifies commodities, the Goldman Sachs GTX Index, as a second tier variable that is influencing market direction. Bears need GTX under 2344 (now at 2393) which will create broad market selling.

Keybot prints three pre-scheduled numbers this week; one on Tuesday morning, the second on Tuesday evening for the EOM (end-of-month) and third, on Friday morning before the opening bell. Pay attention to SPX 2292 but the bears need price to move steadily lower through 2292 and not bounce from here as it did on Friday.

2/5/17; 7:00 PM EST =
2/3/17; 9:00 AM EST =
1/31/17; 7:00 PM EST EOM =
1/31/17; 10:00 AM EST =
1/29/17; 7:00 PM EST = +68; signal line is +82 but algorithm remains long
1/27/17; 10:00 AM EST = +68; signal line is +82 but algorithm remains long

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