STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains long but is champing at the bit to go short. The drama continues with the Federal Reserve rate decision on tap tomorrow afternoon. The algo number is 9 points below the signal line so Keybot wants to flip short but the internal parameters will not yet fully latch to permit the move so the beat goes on.

If the SPX drops below 3001, Keybot will likely flip short. Hump day begins with the S&P 500 at 3013 so that would be a 13-point drop for the SPX. Bears need equities to sell off slow and steady and not display a gap-down move at the Wednesday open since this may activate an internal timer and delay any move to the short side for about 90 minutes.

Copper collapses on Tuesday after the bulls jammed it higher on Monday to try and support the stock market. Bulls need CPER above 16.94 (now at 16.78 creating market negativity) and/or GTX (commodities) above 2490 (now at 2487 creating market negativity).

Bears need higher volatility to create market mayhem. Bears need the VIX above 14.40 (now at 13.91 creating market positivity).

Note that all three parameters are pennies from their bull-bear lines in the sand. Copper, commodities and volatility are controlling stock market direction currently. Nothing else matters. Retail stocks are also starting to appear on the quant's radar.

Markets may idle sideways until the Fed decision at 2 PM EST followed by Chairman Powell's song-and-dance press conference at 2:30 PM EST. Wednesday afternoon may see wild price action.

Watch CPER 16.94, GTX 2490 and VIX 14.40; these Three Stooges tell you everything you need to know about stock market direction.Tomorrow is the end of July trading (EOM) which will be an up month.

7/31/19; 7:00 PM EST EOM =

7/30/19; 10:00 AM EST = +58; signal line is +67 but algorithm remains long

7/30/19; 9:36 AM EST = +58; signal line is +68 but algorithm remains long

7/29/19; 10:34 AM EST = +74; signal line is +69

7/29/19; 10:07 AM EST = +58; signal line is +70 but algorithm remains long

7/29/19; 9:40 AM EST = +74; signal line is +71

7/28/19; 7:00 PM EST = +58; signal line is +71 but algorithm remains long

STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is on the long side but the algo continues to want to flip short. The internal parameters will not fully latch to allow the move as yet. The algo number is 13 points below the signal line.

The SPX prints a new all-time record high at 3027.98, call it 3028, and a new all-time closing high at 3025.86, call it 3026, on Friday, 7/26/19. Humorously, copper tanks -0.7% and loses -2.5% on the week. The global economy is slowing as evidenced by copper. 'Peak Auto' and a top in the housing market is likely occurring (the two largest users of copper). Copper should be leading higher considering the record stock market highs. The market behavior hints that the never-ending upside in stocks is due to the ongoing central banker largess for over one decade and has very little to do with economic growth projections. 

The stock market bulls need lower volatility and higher copper and commodities to guarantee further upside. Bulls need CPER above 16.97 (now at 16.85) and/or GTX above 2492 (now at 2457). Bulls need a +0.7% pop in copper futures overnight into Monday to prove they have the beans to take stocks higher.

The stock market bears need higher volatility and lower copper and commodities to send equities lower and get Keybot to flip short. Bears need the VIX to move above 14.35 (now at 12.16) which will immediately create serious market turmoil.

If the SPX drops below 3013, Keybot the Quant will likely flip short, hence the imminent turn notation is in the title line. The SPX begins the week at the 3026 record high. The bears would benefit from a slow steady move lower and not a gap-down move. If copper or commodities flip bullish, the stock market bulls will be singing songs and carrying on as the SPX marches higher to more record highs.

For the week ahead, Keybot prints four pre-scheduled numbers; one on Tuesday, one on Wednesday for month-end (EOM) and two on Friday morning.

Watch copper futures overnight and the VIX begins trading at 3 AM EST. Bulls need to immediately see an 11-handle in the VIX to prove that stocks can print further highs.

8/4/19; 7:00 PM EST =

8/2/19; 10:00 AM EST =

8/2/19; 9:00 AM EST =

7/31/19; 7:00 PM EST EOM =

7/30/19; 10:00 AM EST =

7/28/19; 7:00 PM EST = +58; signal line is +71 but algorithm remains long

7/25/19; 12:33 PM EST = +58; signal line is +72 but algorithm remains long

STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant algorithm flips to the long side on hump day at SPX 3009 but is already champing at the bit to go short again. The algo number is 14 points below the signal line wanting the model to flip bearish but the internal parameters will not yet fully latch to permit the move.

Bears need the SPX below 2997; if so, it is highly likely that Keybot will flip short, hence the imminent turn notation remains in the title line. Bears will receive help if the VIX can move above 14.37.

Bulls need to prevent the SPX from dropping below 2997. If so, they will skate into the weekend without worry. Bulls need CPER above 16.97, now only a penny below at 16.96. Higher copper will guarantee more upside price action for equities. Bulls will also rejoice with higher commodities needing GTX to move above 2492.

If there is a big gap-down move in the S&P 500 at Friday's opening bell, that is not good for bears. Short sellers need to see a slow steady move lower and then a failure at SPX 2997. This will open the door to the downside, as long as copper remains bearish. If a gap-down does occur, it may trigger a timer and Keybot will likely delay any action for about 90 minutes.

Watch copper futures overnight since as copper goes, so goes the market.

On the last trade that lasted one week, the algo program lost a smidgeon. The actual trading lost -1%. The benchmark S&P 500 is up +20% this year from 2500-ish to 3000-ish. The actual trading generated by Keybot the Quant is up over +29% this year outperforming the SPX and most everyone on Wall Street. The beat goes on.

7/28/19; 7:00 PM EST =

7/25/19; 12:33 PM EST = +58; signal line is +72 but algorithm remains long

7/24/19; 11:06 AM EST = +74; signal line is +74 but algorithm remains long

7/24/19; 10:36 AM EST = +88; signal line is +75; go long 3009; (Benchmark SPX for 2019 = +20.0%)(Keybot algorithm program this trade = -0.3%; Keybot algo for 2019 = +15.9%)(Actual results this trade = -1.0%; Actual trading results for 2019 = +29.4%)

7/24/19; 10:00 AM EST = +74; signal line is +75

7/23/19; 9:36 AM EST = +58; signal line is +75

7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short

7/22/19; 10:51 AM EST = +60; signal line is +74

7/22/19; 9:47 AM EST = +74; signal line is +74 but algorithm remains short

7/22/19; 9:36 AM EST = +60; signal line is +74

7/22/19; 8:28 AM EST = +74; signal line is +75

7/22/19; 8:06 AM EST = +60; signal line is +75

7/22/19; 6:33 AM EST = +74; signal line is +75

7/22/19; 6:15 AM EST = +60; signal line is +75
7/22/19; 4:24 AM EST = +74; signal line is +76

7/22/19; 3:06 AM EST = +60; signal line is +76

7/21/19; 7:00 PM EST = +74; signal line is +76
7/19/19; 10:00 AM EST = +74; signal line is +76

7/17/19; 11:21 AM EST = +74; signal line is +77

7/17/19; 10:43 AM EST = +58; signal line is +77

7/17/19; 10:12 AM EST = +72; signal line is +78; go short 3000; (Benchmark SPX for 2019 = +19.666%)(Keybot algorithm program this trade = +7.6%; Keybot algo for 2019 = +16.2%)(Actual results this trade = +11.0%; Actual trading results for 2019 = +30.4%)

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short during Tuesday's 20-point pop in the S&P 500. Copper failed yesterday so the price action in the overall stock market was noise. Interestingly, stocks rallied on news of a resumption of the US-China trade talks but the number one key component that should have rallied on such news, copper, fell -0.6%. Housing stocks also crumbled in the up tape.

Same dealio today with the market parameters. Copper, commodities and volatility are controlling stock market direction this week thus far. Bears need higher volatility, the VIX above 14.39 (now at 13.06) which will crush equities.

Bulls need CPER above 16.98 (now at 16.91) and/or GTX above 2493 (now at 2475). Any 1 of the 2 turning bullish tells you that more upside is on the way for equities. If both turn bullish, the SPX is headed to more new all-time highs.

Copper is key since the bulls and bears are only separated by 7 pennies which is about 0.4%. Copper futures are currently trading up +0.3% so the bulls are pushing hard to try and get CPER above 16.98 after the opening bell for the regular session.

Interestingly, CPER above 16.98 for a few minutes may not be able to flip the model long, however, if it jogs, say above 16.98 for 10 minutes or so, then back below 16.98 for 10 minutes or a half-hour, then back above 16.98 again, that may set up the move for Keybot to want to flip long. Nonetheless, stocks remain a coin-flip so the imminent turn notation remain in the title line.

The S&P 500 would likely at least need to move above 3006 today for the model to flip long. The SPX begins at 3005 so the bulls only need a point higher to increase the likelihood that Keybot will flip long, but alas, S&P futures are down -9 with the VIX at 13.06 about 3 hours before the opening bell. 

Bulls need higher copper and commodities while bears need higher volatility. This is all that matters for stock market direction currently. The Mueller hearings begin in a couple hours which may create market angst or joy. 

7/28/19; 7:00 PM EST =

7/23/19; 9:36 AM EST = +58; signal line is +75

7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains short after an active Monday. The model prints 10 numbers yesterday. It is always interesting how the quant may not print any numbers on any given day and then other days it spits out numbers like crazy. The stock market direction is a coin flip as evidenced by the algo number and signal line both at +74. Markets have to make a decision.

Bears need lower copper and higher volatility; CPER below 16.97 and VIX above 14.42, respectively. Bulls need higher commodities; GTX above 2491 to begin the path to more all-time highs.

CPER is at 17.03 and VIX is now trading and printing at the 13.31 palindrome. S&P futures are up +6 about 4-1/2 hours before the opening bell for the Tuesday session. The bears need 6 pennies lower on CPER which represents a -0.4% drop in copper futures. Copper was trading flat until about 50 minutes ago when it quickly dropped to .... wait for it ..... -0.4%.

The battle is with copper and volatility both in the bull camp to begin the day but will they end the day the same? If both parameters remain bullish, and the SPX moves above 2991, Keybot may flip to the long side, hence the imminent turn notation is in the title line.

The SPX begins at 2985 and if a +6 pop occurs at the opening bell the S&P 500 will be at ...... wait for it ....... 2991. If CPER or VIX turn bearish, stocks will begin falling in earnest. Today may be a key pivot day where one side or the other takes strong control.

As mentioned yesterday, the housing market parameter that is programmed into Keybot the Quant has turned bearish after over 7 years in the bull camp. This is important since if it remains negative, which is highly likely, it will prevent Keybot from printing a +100 maximum number going forward. This hints that a significant long-term top may be printing for the US stock market (think months and perhaps years).

7/28/19; 7:00 PM EST =

7/22/19; 11:04 AM EST = +74; signal line is +74 but algorithm remains short

7/22/19; 10:51 AM EST = +60; signal line is +74

7/22/19; 9:47 AM EST = +74; signal line is +74 but algorithm remains short

7/22/19; 9:36 AM EST = +60; signal line is +74

7/22/19; 8:28 AM EST = +74; signal line is +75

7/22/19; 8:06 AM EST = +60; signal line is +75

7/22/19; 6:33 AM EST = +74; signal line is +75

7/22/19; 6:15 AM EST = +60; signal line is +75
7/22/19; 4:24 AM EST = +74; signal line is +76

7/22/19; 3:06 AM EST = +60; signal line is +76

7/21/19; 7:00 PM EST = +74; signal line is +76

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is on the short side from SPX 3000 since Wednesday, 7/17/19. The algo number, however, is only 2 measly points below the signal line so the bull-bear tug-o-war continues. The S&P 500 prints new all-time highs above SPX 3K in recent days above the 2941 from last Fall. The 2941 will likely be a key support test at some point in the days ahead.

Note that the quant came up to print a few maximum +100 numbers again. This has occurred in clusters a few times over the last 1-1/2 years and represents epic and historic price action in the US stock market. The algorithm is an oscillator so, by definition, it has +100 as its maximum possible reading (uber off-the-charts bullish) and -100 as the minimum possible reading (end-of-the-world bearishness). The stock market is very likely printing a multi-month and perhaps very long-term multi-year top during the last 10 months.

If you are a young person with exposure to the stock market on the long side, think long and hard about what you own. There is no harm in sitting out of the stock market for a year or so to see what happens. After the 1929 crash, the investors that were in cash were in perfect position to buy assets on the cheap and in a few short years were multi-millionaires. Everyone else lost their shirts and spent the next decade crying in their beers.

As an aside, the quant incorporates a housing market indicator, based on ongoing economic data, and on Wednesday, 7/17/19, the model slips into a housing recession signal. The housing recovery began over 7 years ago but this proprietary indicator in the quant hierarchy says the housing party is over.

On the last trade, from June into mid-July, about 6 weeks or so in length, on the long side, the algo program gains +8% and the actual trading gains a big +11% (due to the long QQQ (tech) ETF). Keybot flipped out of QQQ and into QID. The benchmark SPX is up +19.666% this year, call it +20% from 2500-ish to 3000-ish, a 500-point-ish gain this year. The actual trading generated by Keybot the Quant is up an astounding +30%. Clearly, the Keybot the Quant algorithm is outperforming every quant model on Wall Street as well as most every high-paid strategist and analyst in the financial markets. Keybot is a smart robot.

This message is typed on Sunday evening on the US East Coast. US futures are trading. S&P's are up +1 call it flat. The market can go either way. Very simply, copper, volatility and commodities are the three main parameters currently dictating broad stock market direction.

The stock market bears need weaker copper and/or higher volatility to guarantee lower equities. Bears need CPER under 16.95 (now at 17.17) and/or VIX above 14.53 (now at 14.45). If 1 of the 2 parameters turn bearish, stocks will be in big trouble. If both turn bearish, stocks are going to be falling like rocks.

The stock market bulls need stronger commodities to prove that more upside in equities is on the way. Bulls need GTX above 2495 (now at 2452). The bulls are going to be driving the stock market strongly higher if commodities rally. If GTX flips bullish, consider the imminent turn to the long side to be in play but the SPX would likely have to move above the 3006-ish level to cause Keybot to flip long.

You can see that the copper and volatility parameters are a game of pennies. Watch copper futures trading overnight since it will give you a heads up about the US stock market. Weaker copper is a huge feather in the bear's cap while strong copper will have the bulls cheering for victory.

VIX is only 8 cents from signaling bigtime stock market trouble. This is the key parameter to watch; VIX 14.53. It will tell you the market direction story ahead. Vol begins trading at 3 AM EST so that will provide a very important heads-up for US trading on Monday. Bears win big if the VIX pops above 14.53 but the bulls will remain very confident below 14.53. The beat goes on.

7/30/19; 10:00 AM EST =

7/28/19; 7:00 PM EST =

7/21/19; 7:00 PM EST = +74; signal line is +76

7/19/19; 10:00 AM EST = +74; signal line is +76

7/17/19; 11:21 AM EST = +74; signal line is +77

7/17/19; 10:43 AM EST = +58; signal line is +77

7/17/19; 10:12 AM EST = +72; signal line is +78; go short 3000; (Benchmark SPX for 2019 = +19.666%)(Keybot algorithm program this trade = +7.6%; Keybot algo for 2019 = +16.2%)(Actual results this trade = +11.0%; Actual trading results for 2019 = +30.4%)

7/17/19; 9:36 AM EST = +72; signal line is +77 but algorithm remains long

7/17/19; 9:00 AM EST = +58; signal line is +77 but algorithm remains long

7/16/19; 1:29 PM EST = +70; signal line is +77 but algorithm remains long

7/16/19; 12:41 PM EST = +84; signal line is +77

7/15/19; 12:56 PM EST = +100; signal line is +77

7/15/19; 10:36 AM EST = +84; signal line is +76

7/15/19; 10:12 AM EST = +100; signal line is +76

7/15/19; 10:02 AM EST = +84; signal line is +75

7/14/19; 7:00 PM EST = +100; signal line is +75

7/12/19; 3:42 PM EST = +100; signal line is +74

7/10/19; 9:36 AM EST = +84; signal line is +73

7/10/19; 7:45 AM EST = +70; signal line is +73 but algorithm remains long

7/10/19; 7:03 AM EST = +56; signal line is +74 but algorithm remains long

7/9/19; 9:39 AM EST = +70; signal line is +74 but algorithm remains long

7/9/19; 4:13 AM EST = +56; signal line is +74 but algorithm remains long

7/8/19; 10:43 AM EST = +70; signal line is +74 but algorithm remains long
7/8/19; 9:58 AM EST = +84; signal line is +74

7/7/19; 7:00 PM EST = +70; signal line is +73 but algorithm remains long
7/5/19; 9:00 AM EST = +70; signal line is +73 but algorithm remains long

7/2/19; 9:37 AM EST = +70; signal line is +72 but algorithm remains long

7/1/19; 2:54 PM EST = +84; signal line is +71

7/1/19; 2:41 PM EST = +70; signal line is +69

7/1/19; 2:30 PM EST = +84; signal line is +68

7/1/19; 2:16 PM EST = +70; signal line is +67

7/1/19; 1:26 PM EST = +84; signal line is +66

7/1/19; 1:11 PM EST = +70; signal line is +65

7/1/19; 9:36 AM EST = +84; signal line is +64
6/30/19; 7:00 PM EST EOM EOQ2 EOH1 = +70; signal line is +62

6/28/19; 3:25 PM EST = +70; signal line is +60

6/28/19; 2:42 PM EST = +56; signal line is +58 but algorithm remains long

6/28/19; 10:00 AM EST = +70; signal line is +57

6/26/19; 10:36 AM EST = +70; signal line is +54

6/26/19; 9:55 AM EST = +86; signal line is +53

6/26/19; 9:36 AM EST = +70; signal line is +50
6/25/19; 2:24 PM EST = +72; signal line is +47

6/25/19; 1:25 PM EST = +86; signal line is +45

6/25/19; 1:16 PM EST = +72; signal line is +43

6/25/19; 11:19 AM EST = +86; signal line is +40

6/25/19; 10:27 AM EST = +72; signal line is +38

6/25/19; 9:39 AM EST = +86; signal line is +35
6/25/19; 9:36 AM EST = +72; signal line is +31

6/23/19; 7:00 PM EST = +56; signal line is +28

6/21/19; 12:21 PM EST = +56; signal line is +26

6/21/19; 10:49 AM EST = +70; signal line is +23
6/20/19; 3:59 PM EST = +56; signal line is +20

6/20/19; 3:02 PM EST = +70; signal line is +17

6/18/19; 10:02 AM EST = +56; signal line is +14

6/18/19; 9:00 AM EST = +40; signal line is +12

6/16/19; 7:00 PM EST = +40; signal line is +10
6/14/19; 10:00 AM EST = +40; signal line is +8

6/12/19; 9:43 AM EST = +40; signal line is +6

6/10/19; 9:38 AM EST = +56; signal line is +4

6/9/19; 7:00 PM EST = +40; signal line is +3

6/7/19; 9:51 AM EST = +40; signal line is +2

6/7/19; 9:00 AM EST = +24; signal line is 0

6/4/19; 3:09 PM EST = +24; signal line is -1

6/4/19; 2:13 PM EST = +8; signal line is -1

6/4/19; 2:04 PM EST = +24; signal line is -2

6/4/19; 1:16 PM EST = +8; signal line is -2

6/4/19; 12:53 PM EST = +24; signal line is -3

6/4/19; 12:45 PM EST = +8; signal line is -3

6/4/19; 12:38 PM EST = -6; signal line is -2 but algorithm remains long

6/4/19; 12:07 PM EST = +8; signal line is -1

6/4/19; 11:48 AM EST = +24; signal line is +1

6/4/19; 11:35 AM EST = +8; signal line is +1; go long 2788; (Benchmark SPX for 2019 = +11.2%)(Keybot algorithm program this trade = +1.5%; Keybot algo for 2019 = +8.6%)(Actual results this trade = +1.3%; Actual trading results for 2019 = +19.4%)

STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains long but is champing at the bit to go short. Bulls need higher copper and commodities to continue the new all-time stock market highs and the SPX above 3K. Bears need higher volatility which will roll the stock market over to the downside and likely flip the model short. The SPX 2978 level is key for Friday trading; the S&P 500 begins the Friday session at 2996.

7/7/19; 7:00 PM EST =

7/5/19; 9:00 AM EST =

7/2/19; 9:37 AM EST = +70; signal line is +72 but algorithm remains long

7/1/19; 2:54 PM EST = +84; signal line is +71

7/1/19; 2:41 PM EST = +70; signal line is +69

7/1/19; 2:30 PM EST = +84; signal line is +68
7/1/19; 2:16 PM EST = +70; signal line is +67
7/1/19; 1:26 PM EST = +84; signal line is +66
7/1/19; 1:11 PM EST = +70; signal line is +65
7/1/19; 9:36 AM EST = +84; signal line is +64
6/30/19; 7:00 PM EST EOM EOQ2 EOH1 = +70; signal line is +62
6/28/19; 3:25 PM EST = +70; signal line is +60
6/28/19; 2:42 PM EST = +56; signal line is +58 but algorithm remains long
6/28/19; 10:00 AM EST = +70; signal line is +57
6/26/19; 10:36 AM EST = +70; signal line is +54

6/26/19; 9:55 AM EST = +86; signal line is +53

6/26/19; 9:36 AM EST = +70; signal line is +50
6/25/19; 2:24 PM EST = +72; signal line is +47

6/25/19; 1:25 PM EST = +86; signal line is +45

6/25/19; 1:16 PM EST = +72; signal line is +43

6/25/19; 11:19 AM EST = +86; signal line is +40

6/25/19; 10:27 AM EST = +72; signal line is +38

6/25/19; 9:39 AM EST = +86; signal line is +35
6/25/19; 9:36 AM EST = +72; signal line is +31

6/23/19; 7:00 PM EST = +56; signal line is +28
6/21/19; 12:21 PM EST = +56; signal line is +26
6/21/19; 10:49 AM EST = +70; signal line is +23
6/20/19; 3:59 PM EST = +56; signal line is +20

6/20/19; 3:02 PM EST = +70; signal line is +17
6/18/19; 10:02 AM EST = +56; signal line is +14
6/18/19; 9:00 AM EST = +40; signal line is +12
6/16/19; 7:00 PM EST = +40; signal line is +10
6/14/19; 10:00 AM EST = +40; signal line is +8

6/12/19; 9:43 AM EST = +40; signal line is +6

6/10/19; 9:38 AM EST = +56; signal line is +4