STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side on Monday at SPX 3229. The chips and the banks fail creating market mayhem. The SPX crashes 112 points, -3.4%, to 3226. That beating will leave a mark. The bears are in control of the stock market with the algo number 13 points below the signal line (not as much as you would think so the caution flag remains out).

Bears need weaker retail stocks to keep the negativity going. Bulls need either chips or banks to recover to create market stability and the start of a relief rally. Bears need RTH below 122.34. Bulls need SOX above 1856 and/or XLF above 30.51. One of these Three Stooges will flinch and light the path ahead. If status quo remains with happy retail stocks and sad semi's and banks, stocks will chop sideways.

On the last trade, that ran for 3 weeks, the quant program and actual trading each lose a couple percent. The benchmark SPX gives up all the 2020 joy and turns negative on the year now down -0.1% after the first 2 months. The Keybot the Quant program is down a percent on the year but the actual trading generated by the quant remains up nicely with a +6.2% gain thus far in 2020. Keybot exits SPY and enters PSQ.

Keybot prints a pre-scheduled number this morning and on Friday morning. The EOM is on Friday. March trading begins Monday, 3/2/20. The beat goes on.

3/8/20; 7:00 PM EST =

3/6/20; 9:00 AM EST =

3/1/20; 7:00 PM EST EOM =

2/28/20; 10:00 AM EST =

2/25/20; 10:00 AM EST =

2/24/20; 12:10 PM EST = +24; signal line is +37; go short 3229; (Benchmark SPX for 2020 = -0.1%)(Keybot algo this trade = -1.8%; Keybot algo for 2020 = -1.1%)(Actual trading results this trade = -1.6%; Actual trading results for 2020 = +6.2%)

2/24/20; 9:36 AM EST = +24; signal line is +38 but algorithm remains long

2/23/20; 7:00 PM EST = +56; signal line is +38

2/19/20; 9:00 AM EST = +56; signal line is +38

2/18/20; 3:06 AM EST = +56; signal line is +38

2/16/20; 7:00 PM EST = +70; signal line is +36

2/14/20; 3:59 PM EST = +70; signal line is +34

2/14/20; 10:00 AM EST = +56; signal line is +33

2/9/20; 7:00 PM EST = +56; signal line is +31

2/7/20; 9:00 AM EST = +56; signal line is +30

2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long heading into the new week of trading. The quant has been very quiet ever since it flipped long last Tuesday. The bulls are in control of the stock market with the algo number 25 points above the signal line. The SPX prints an all-time high last week at 3348.

Bulls need lower volatility and the VIX below 13.85 to guarantee upside fun ahead for equities. Each day the VIX cannot move below 13.85 is a big plus for the bears.

Bears need weaker banks and the XLF below 30.30. Bears also need weaker chips and the SOX below 1828. If 1 of the 2 turn bearish, the caution flag will be out. If both flip negative, the imminent turn to the short side will be in play, and then if the SPX drops below 3322, about a 5 point loss, Keybot will likely flip short. Markets remain erratic and unstable.

Keybot prints one pre-scheduled number in the week ahead on Friday morning.

2/16/20; 7:00 PM EST =

2/14/20; 10:00 AM EST = 

2/9/20; 7:00 PM EST = +56; signal line is +31

2/7/20; 9:00 AM EST = +56; signal line is +30

2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long with the US Monthly Jobs Report on tap in a few hours at 8:30 AM EST. The VIX is at 15.12 and S&P futures are -2. Copper tanks -1%. The quant has not printed a number since it flipped long on Tuesday morning.

The battle for stock market directional control is volatility and copper in the bear camp versus chips and banks in the bull camp. One of these four will flinch, perhaps this morning after the jobs report is known, and that will light the path forward.

Bulls need VIX below 13.84 and CPER above 16.91. The VIX 200-day MA can be used as an initial signal line and it sits at 15.12 exactly where price is now. After the jobs report, if the VIX falls below 15 and tracks lower, a run at the 13.84 bull-bear line in the sand is on tap which will determine the fate of stocks going forward. Obviously, if the VIX jumps higher above 15.12, the stock market will be selling off. Copper is negative this morning so the bull's hopes to pump copper higher to help the stock market appear formidable.

Bears need XLF below 30.29 and SOX below 1831. Looking at current prices, these bull-bear lines in the sand are about 2% to 3% above so the bears have their work cut out for them as well.

Volatility and banks are what matter. VIX 15.12, VIX 13.84, and XLF 30.29 tell you everything you need to know about stock market direction for the Friday session. Keybot prints a pre-scheduled number before the opening bell.

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long and did not print any numbers yesterday. The bulls are pumping retail stocks, banks and chips higher providing lift to the broad stock market. Bears obviously need to weaken these sectors or they got nothing.

Bulls will keep the party going with low volatility and higher copper. Bulls need VIX below 13.85 and/or CPER above 16.90. The VIX is currently trading at 15.33 and copper futures are up +0.4% about 4-1/2 hours before the opening bell for the US regular Thursday trading session. Copper was far higher a few hours ago.

Thus, the path forward and higher for the bulls and the stock market will only continue with lower volatility and higher copper.

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant is on the long side after yesterday's big rally on the PBOC money pump. The bulls are in control of stock market direction with the algo number 27 points above the signal line. Bulls are goosing copper this morning to continue the rally. Bulls will focus on sending copper higher and smacking volatility lower.

Bulls need the VIX below 13.90 to claim solid victory ahead. The VIX is now trading at 15.666 five hours before the opening bell for the US regular hump day trading session. S&P futures are up +26 staging a 32-point turnaround over the last hour so the bulls want to play some more.

Bears need to send the banks and chips lower to stop the stock market rally. Bears need XLF below 30.26 and/or SOX below 1828. Either parameter flipping into the bear camp will immediately stop the rally. If both turn bearish, and the SPX slips below 3281, trending lower, Keybot would likely flip short. The caution flag will be out if  one parameter turns bearish and the imminent turn to the short side will be in play if both turn bearish. Bears will also receive strength if retail stocks falter. Bears need RTH below 120.06.

Bulls are in the driver's seat. Copper, volatility, banks, chips and retail stocks are all in play and the major factors currently dictating stock market direction. The price action remains erratic and unstable.

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant flips long a few minutes after the opening bell at SPX 3288. The bulls goose the banks, retail stocks and chips resulting in euphoric upside glory. The bulls are in charge with the algo number 27 points above the signal line. The choppy whippy market action continues.

Volatility is the odd man out. The VIX remains in the bear camp. Thus, to continue the stock market joy, the bulls must push the VIX below 13.93. Stocks can rally all they want but if the VIX does not go under 13.93, the bulls got nothing, and the stock market will roll over to the downside again. If VIX goes sub 13.93, it is nothing but blue skies and rainbows ahead and Fed Chairman Powell will be carried around on adoring trader's shoulders to celebrate.

The bears need to pull one of the following three parameters back into their camp to stop the rally. Bears need RTH below 119.90, XLF below 30.26 and/or SOX under 1823. 

On the last trade, that ran for three days, the algo program and actual trading each lose a percent. The benchmark SPX is up a couple percent this year with the actual trading generated by Keybot up about +8% thus far this year. Keybot exits SH and enters SPY remaining in the 1x ETF's due to the whipsaw pricing action.

The bulls turned the tables on the bears this morning thanks to the PBOC promising endless supplies of easy money to pump stocks higher. Whoa. The SPX is up 51 points, +1.6% to 3300. Ding, ding. Sound the Seven Trumpets!

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/4/20; 9:36 AM EST = +56; signal line is +29; go long 3288; (Benchmark SPX for 2020 = +1.8%)(Keybot algo this trade = -1.2%; Keybot algo for 2020 = +0.7%)(Actual trading results this trade = -1.2%; Actual trading results for 2020 = +7.8%)

2/3/20; 3:41 PM EST = +8; signal line is +28

2/3/20; 3:36 PM EST = +24; signal line is +30

2/3/20; 3:29 PM EST = +40; signal line is +30 but algorithm remains short

2/3/20; 3:18 PM EST = +24; signal line is +31

2/3/20; 3:10 PM EST = +40; signal line is +31 but algorithm remains short

2/3/20; 1:55 PM EST = +24; signal line is +32

2/3/20; 1:43 PM EST = +40; signal line is +33 but algorithm remains short

2/3/20; 1:18 PM EST = +24; signal line is +33
2/3/20; 12:52 PM EST = +40; signal line is +34 but algorithm remains short
2/3/20; 12:38 PM EST = +24; signal line is +34
2/3/20; 12:24 PM EST = +40; signal line is +35 but algorithm remains short
2/3/20; 11:41 AM EST = +24; signal line is +35
2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short
2/3/20; 9:36 AM EST = +24; signal line is +35
2/2/20; 7:00 PM EST EOM = +8; signal line is +35
1/31/20; 1:15 PM EST = +8; signal line is +37
1/31/20; 10:05 AM EST = +24; signal line is +39
1/31/20; 10:00 AM EST = +40; signal line is +39 but algorithm remains short
1/31/20; 9:39 AM EST = +40; signal line is +40 but algorithm remains short
1/31/20; 9:36 AM EST = +56; signal line is +40 but algorithm remains short
1/30/20; 3:01 PM EST = +40; signal line is +39 but algorithm remains short
1/30/20; 2:15 PM EST = +24; signal line is +39
1/30/20; 12:34 PM EST = +8; signal line is +40
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%)

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

Keybot the Quant remains short. The algo prints 14 numbers yesterday a very active session. The bulls were full of bluster in the Monday session and then folded like a cheap suit into the closing bell. The bears are in charge of stock market direction with the algo number 20 points below the signal line. However, the bulls continue knocking at the door and S&P futures are up over 30 points about 3-1/2 hours before the opening bell for the regular US Tuesday trading session.

The bulls want to come and play on Tuesday so we will see what they got. Bulls need RTH above 119.90, XLF above 30.26, SOX above 1823 and/or VIX below 13.93. All four parameters are currently in the bear camp creating the stock market sogginess. The strength of the bullish relief rally directly depends on these four parameters. In other words, the move higher in the SPX is not as important as how many of the above four parameters flip bullish because this tells you the lasting strength of the stock market for the days ahead, or lack of strength if that will be the case.

If 1 of the 4 turn bullish, stocks will rally higher and the selling is over. If 2 of the 4 turn bullish, and the SPX moves above 3268, Keybot will likely flip long. If 3 of the 4 turn bullish, Keybot would likely flip long immediately regardless of SPX price, hence the imminent turn (to the long side) is in the title line and on the table.

Bears can allow one parameter to turn bullish without much damage but will be in trouble if 2 or more of the 4 parameters turn bullish. The stage is set. Don't worry so much about the rally in the stock indexes, instead monitor the 4 parameters since they tell you the true path forward.

Another thing you can watch is the first few minutes of price action in the S&P 500. Record the high print after the first 6 minutes of trading. Stocks may pop wildly higher after the opening bell, as the futures indicate, but may fall on their sword. So watch that SPX price high during the first minutes of trading. If the bears hold that level and prevent the S&P 500 from moving higher, they will have hope to hold back the bull rally.

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/3/20; 3:41 PM EST = +8; signal line is +28

2/3/20; 3:36 PM EST = +24; signal line is +30

2/3/20; 3:29 PM EST = +40; signal line is +30 but algorithm remains short

2/3/20; 3:18 PM EST = +24; signal line is +31

2/3/20; 3:10 PM EST = +40; signal line is +31 but algorithm remains short

2/3/20; 1:55 PM EST = +24; signal line is +32

2/3/20; 1:43 PM EST = +40; signal line is +33 but algorithm remains short

2/3/20; 1:18 PM EST = +24; signal line is +33

2/3/20; 12:52 PM EST = +40; signal line is +34 but algorithm remains short
2/3/20; 12:38 PM EST = +24; signal line is +34

2/3/20; 12:24 PM EST = +40; signal line is +35 but algorithm remains short

2/3/20; 11:41 AM EST = +24; signal line is +35

2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short

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

Keybot the Quant remains short but is champing at the bit to go long with the new trading week off and running. The bulls are goosing the retail stocks and banks to create the upside joy. Interestingly, the chips remain in the bear camp.

If the SOX moves above 1827 (now at 1810), or, if the SPX moves above 3282 (now at 3262), Keybot the Quant would likely flip long. Either condition would likely create the bull go-signal to go long.

Bears need to push the XLF below the 30.26 bull-bear line in the sand (now at 30.42) to regain control of stock market direction to the downside. Bulls need stronger chips while bears need weaker banks. Who will win?

2/7/20; 9:00 AM EST =

2/3/20; 9:43 AM EST = +40; signal line is +36 but algorithm remains short

2/3/20; 9:36 AM EST = +24; signal line is +35

2/2/20; 7:00 PM EST EOM = +8; signal line is +35

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short. The bears finally stretch their muscles a little bit on Friday with a deep selloff. The algo wanted to go long on Thursday afternoon and Friday morning but the S&P 500 was trading negatively the whole day and 35 minutes into the session the wheels fell off the bus. The bears are in control of the market with the algo number 30 points below the signal line.

The month of January ends with the SPX down -0.2%. After all that market joy during the month, it ends in negativity. As January goes, so goes the year (typically).

The bears should exert steady downward force on the stock market as long as the algo number remains at +8 or lower. If the NYA Index would fall about -3%, that could potentially create a flash crash or all-out crash scenario.

The bulls are on their back feet but have lots of avenues to explore to develop calm and stop the downside selling. Bulls need RTH above 120.00, XLF above 30.32 and/or SOX above 1827. S&P futures are up +21 with the US regular Monday trading session set to open in about 20 minutes. Bulls need stronger retail stocks, banks and chips, respectively. The extent that these three parameters turn bullish, or not, dictate the strength of the relief rally.

If 1 of the 3 turn bearish, bulls are in the driver's seat today. If 2 of the 3 turn bullish, the imminent turn to the long side is in play and if the SPX would then move above 3282, a long way higher, Keybot would flip long. This is not likely today, but you never know. Bulls will likely try to turn 1 or 2 of the 3 parameters bullish today and then try to push the SPX higher tomorrow to win victory.

Caution is warranted if all 3 parameters turn bullish today because this may cause Keybot to immediately flip long; watch this very closely.

Bears simply need to keep the 3 parameters in their camp and they will spend the coming days slapping the bulls to and fro.

Keybot prints one pre-scheduled number this week on Friday morning. Watch the chips, retail stocks and banks since these three sectors are currently dictating broad stock market direction.

2/9/20; 7:00 PM EST =

2/7/20; 9:00 AM EST =

2/2/20; 7:00 PM EST EOM = +8; signal line is +35

1/31/20; 1:15 PM EST = +8; signal line is +37
1/31/20; 10:05 AM EST = +24; signal line is +39
1/31/20; 10:00 AM EST = +40; signal line is +39 but algorithm remains short
1/31/20; 9:39 AM EST = +40; signal line is +40 but algorithm remains short
1/31/20; 9:36 AM EST = +56; signal line is +40 but algorithm remains short
1/30/20; 3:01 PM EST = +40; signal line is +39 but algorithm remains short