Wednesday, May 29, 2019


Keybot the Quant remains short. The algo number turns negative and sits 33 points below the signal line. The NYA index failed into the bear camp during the last few minutes of trading on Tuesday; this is a serious negative stock market development. The NYA must regain the 12473 level (now at 12466) as soon as possible or the stock market will begin falling apart. Watch it at Wednesday's opening bell since it will immediately tell you the mood of the market.

The bears are cruising along after Memorial Day, 4-1/2 hours before the hump day opening bell, with the S&P futures down -19 and the VIX up to 18.57. The bears need the SPX below 2783 which is a major line in the sand for the stock market. If 2783 fails, all hope will be lost for the bulls and the bears will rule with an iron fist going forward. The SPX begins Wednesday at 2802. If the futures play out for the regular session, the S&P 500 would drop to 2783 on the opening bell. How do you like that? There is drama on tap this morning.

The bulls need NYA above 12473, XLF above 26.94 (now at 26.55) and GTX above 2540 (now at 2533); a higher NYSE Composite Index, higher banks and higher commodities, respectively. If any 1 of the 3 flip bullish, the caution flag will be out. If 2 of the 3 turn bullish, the imminent turn to the long side will be in play for Keybot.

For now, the bears are pushing stocks lower and threatening a major stock market failure. NYA 12473 and SPX 2783 tell you everything you need to know about the stock market direction going forward.

Utilities have not failed as yet which hints that the bears may not have the oomph to create market carnage at this time. The utes typically move down coincidentally or before the broad stock market rolls over when a long extended sick market period is on tap. Thus, the bears need the utilities to immediately collapse to signal market carnage ahead. If utes hold up, the SPX may be able to hold the line at 2783 and recover. These scenarios are interesting to ponder but Keybot only sees 1's and 0's so time will tell the story.

6/2/19; 7:00 PM EST EOM =
5/31/19; 10:00 AM EST =
5/28/19; 3:59 PM EST = -6; signal line is +27
5/28/19; 10:00 AM EST = +8; signal line is +29
5/26/19; 7:00 PM EST = +8; signal line is +31

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