STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side at SPX 3250 a short time ago. There is lots of strangeness going on in markets right now. The gap down open activated a timer that delayed the quant from flipping short, however, the deterioration in the stock market forced the move mid-morning. The chips failed into the bear camp at the bull-bear line in the sand at SOX 1830.60 but has since recovered.

Stock market direction is determined currently by a battle between the retail stocks and banks versus the chips. Bulls need the RTH above 119.96 and/or XLF above 30.32. If this occurs, the stock market selling will immediately stop and the bulls will begin a relief rally.

Bears need the chips to roll back over and for the SOX to take out 1830.60. If that happens today, stocks may get flushed down the toilet. SOX is trading at 1836 right now at munch time. The bears have it on a silver platter if they want it; all they need to do is squash the chips. Bears need to send the SOX 6 points lower and all Hades would break loose in the stock market; the carnage would begin.

Bulls have to keep the semiconductors elevated or they are dead meat.

The last trade only ran for 9 hours and 36 minutes so it is characterized as a whipsaw by the quant. Therefore, the robot drops down into the single 1x ETF mode and will not reenter 2x ETF's for at least 35 days. Keybot is a smart robot and must think that choppy markets are ahead which chew up bulls and bears alike. The single ETF's will reduce risk. Keybot exits QLD and enters SH. The benchmark S&P 500 has a smidgeon of a gain on the year. The Keybot computer program is up +1.6% on the year and the actual trading generated by Keybot is up +9% thus far this year.

2/2/20; 7:00 PM EST EOM =

1/31/20; 10:00 AM EST =

1/30/20; 11:24 AM EST = +24; signal line is +42

1/30/20; 10:50 AM EST = +8; signal line is +43
1/30/20; 10:40 AM EST = +24; signal line is +46; go short 3250; (Benchmark SPX for 2020 = +0.6%)(Keybot algo this trade = -1.0%; Keybot algo for 2020 = +1.9%)(Actual trading results this trade = -1.4%; Actual trading results for 2020 = +9.0%)

1/29/20; 3:54 PM EST = +24; signal line is +47 but algorithm remains long
1/29/20; 3:05 PM EST = +40; signal line is +48 but algorithm remains long

1/29/20; 10:21 AM EST = +56; signal line is +49

1/29/20; 10:06 AM EST = +40; signal line is +49 but algorithm remains long

1/29/20; 9:36 AM EST = +56; signal line is +50

1/28/20; 3:51 PM EST = +40; signal line is +51 but algorithm remains long

1/28/20; 3:30 PM EST = +56; signal line is +51

1/28/20; 3:13 PM EST = +40; signal line is +52 but algorithm remains long

1/28/20; 2:14 PM EST = +56; signal line is +53; go long 3283; (Benchmark SPX for 2020 = +1.6%)(Keybot algo this trade = +0.6%; Keybot algo for 2020 = +2.9%)(Actual trading results this trade = +0.8%; Actual trading results for 2020 = +10.4%)

Note Added 12:28 PM EST: Here we go. SOX is down to 1831 coming in for a test of the critical 1830.60. Strap yourself in. Attach crash helmets. Let's see what the bears got......... 1831.49 .....  1830.30... boom .....hold on to your hat........the SOX 1830.45 number is the exact bull-bear pivot  point... it is for all the marbles ...... SOX is currently printing at 1830.53.... the bull-bear battle is at a climax ..... the swords are rattling and both are at the top of the castle wall ..... one of them is about to fall over the edge...... the bears take a stab... 1830.29...... 1830.24 ... the bulls may be wounded...... oh my, the bull drops its sword as the blood is beginning to flow...... 1829-handle..... the bull springs back to life like the end of a scary movie....1830.08 ...... perhaps a little back kiss.... 1829...... we may see something very special in markets this afternoon....... whoopsies daisies...... 1828-handle..... do you hear a toilet flushing in the background?

Note Added 12:39 PM EST: There she goes. SOX fails; now printing 1825. Time to focus.