Tuesday, June 27, 2017


Keybot the Quant remains short through the dramatic market machinations. Yesterday, the market bulls had it on a silver platter; all they needed to do was to move the S&P 500 higher slow and steady and not in a gap-up move. Comically, price jumped up in a gap-up move. The algo employs gap-up and gap-down timers so Keybot was not permitted ot go long for 87 minutes and by the time that played out equities had already retraced the bulk of the move.

Today the semiconductors fail and that is what created the downside action in equities. Chips and volatility are the two most important parameters impacting market direction currently. Bulls need SOX above 1057.51 (now at 1048.66) to prove that the upside rally can restart. Market bears need VIX above 11.59 (now at 11.06) to begin a serious drop in equities.

If the semi's recover with SOX above 1057.51, consider the imminent turn to be in play and if the SPX moves above 2440, Keybot may flip long. If VIX moves above 11.59, it is over for stocks; they will be tumbling lower. VIX begins trading at 3 AM EST.

If stocks selloff but the VIX remains below 11.59, the market bears got nothing and stocks will recover higher.

The algo number is 12 points under the signal line with the bears in charge. The battle on hump day is semiconductors versus volatility. Which will win? The winner will send the stock market in that direction. If SOX remains bearish and VIX remains bullish, stocks will stagger along sideways with a slight downward bias.

7/2/17; 7:00 PM EST EOM EOQ2 EOH1 =
6/30/17; 10:00 AM EST =
6/27/17; 3:02 PM EST = +54; signal line is +66
6/27/17; 2:33 PM EST = +70; signal line is +67 but algorithm remains short
6/27/17; 1:50 PM EST = +54; signal line is +68
6/27/17; 10:00 AM EST = +70; signal line is +68 but algorithm remains short
6/25/17; 7:00 PM EST = +70; signal line is +68 but algorithm remains short

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