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

Keybot the Quant remains long as the erratic stock market action continues. Keybot is champing at the bit to go short as evidenced by the algo number 4 points below the signal line, however, the internal parameters will not yet fully latch to permit the move. To keep things simple, and give you something to watch, if the S&P 500, starting at 2863, slips below 2861, Keybot will likely flip short, hence the imminent turn notation is in the title line. This is only 2 negative points but the S&P futures are up +21 points about 2-1/2 hours before the opening bell for the regular US trading session.

Bears simply need the SPX below 2861 and the quant will likely flip short. The best thing for bears is to see a gradual slippage all session long and then once price falls below 2861, equities should begin dropping like rocks. Bears need weaker chips. It sounds like it is a broken record but any downside in the stock market will have zero legs unless the semiconductors weaken. Bears need SOX below 1650 (now at 1713) or they got buptkis going forward.

Bulls need to prevent SPX 2861 and lower from printing at all costs. This is a line in the sand today. At the same time, bulls need lower volatility and stronger copper and banks. Bulls need the VIX to drop below 30.58 (now 32.666), CPER above 14.90 (now at 14.78) and XLF above 23.26 (now at 22.72). Banks popped yesterday and then puked so they may not have much gusto available. Copper has been battling at the key bull-bear line in the sand all week long. Bulls need about a +0.8% pop in copper futures which are currently trading up +0.3% so bulls have more work to do there. The VIX can easily drop a couple handles in a heartbeat, now at 32.55 so keep an eye on volatility.

Summing up all that mumbo-jumbo, bears win going forward and the quant will likely flip short if SPX loses 2861. If SOX loses 1650, the stock market will quickly fall apart.

Bulls win going forward if 2861 does not print today. If VIX drops below 30.58, and/or copper futures pop +0.8% (now up +0.3%), either one will do, the stock market will run strongly higher. If both turn bullish, stocks will catapult higher and a party atmosphere will take hold.

Keybot prints the EOM pre-scheduled number tomorrow evening and May trading begins Friday morning. The US Monthly Jobs Report is next Friday, 5/8/20. Okay, bears, you have it on a silver platter. Do you want it?

5/3/20; 7:00 PM EST =

4/30/20; 7:00 PM EST EOM =

4/28/20; 1:11 PM EST = -53; signal line is -49 but algorithm remains long

4/28/20; 12:46 PM EST = -37; signal line is -49

4/28/20; 11:09 AM EST = -53; signal line is -49 but algorithm remains long

4/28/20; 10:00 AM EST = -37; signal line is -48

4/27/20; 3:59 PM EST = -28; signal line is -49
4/26/20; 7:00 PM EST = -44; signal line is -49

4/24/20; 10:00 AM EST = -44; signal line is -50

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

Keybot the Quant remains long as the whipsaw action continues. Doctor Copper jumped off the gurney and began running towards the bull camp helping rally stocks on Friday afternoon. The bulls remain in charge with the algo 6 points above the signal line.

Keybot prints the Sunday number tomorrow. For next week, it is a battle of copper and volatility versus chips. To create more stock market upside, the bulls must push either CPER above 14.93 (now at 14.77) and/or VIX below 29.45 (now at 35.93). Copper futures trade overnight Sunday into Monday morning and the bulls will need a +1.1% gain to start throwing confetti and singing songs of joy. The VIX begins trading 3 AM EST Monday morning. Both will provide a heads-up on the US stock market direction story hours before the opening bell occurs.

If the stock market rallies on Monday, but copper and volatility remain in the bear camp, equities will weaken and likely roll back over to the downside. Bulls need copper and volatility in their camp to confirm and justify the stock market moving higher.

The bears need weaker chips but the semi's keep floating higher. Put simply, traders are bulled-up on the concept that more chips will be needed now that folks are working at home. Bears need SOX below 1632 (now at 1703) to create market carnage. Bears got nothing until the chip stocks crumble. If SOX 1632 fails, and the SPX loses the 2792 level, Keybot will likely flip short.

Keybot prints a couple pre-scheduled numbers next week one on Tuesday morning and the other Thursday evening for the EOM (end-of-month). Friday is May Day, 5/1/20, the first Friday of the month but it is NOT the Monthly Jobs Report day, 5/8/20 is the jobs report; the BLS needs a day or two to analyze and report the data. 

5/3/20; 7:00 PM EST =

4/30/20; 7:00 PM EST EOM =

4/28/20; 10:00 AM EST =

4/26/20; 7:00 PM EST =

4/24/20; 10:00 AM EST = -44; signal line is -50

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

Keybot the Quant remains on the long side as the daily market turmoil continues. The pre-scheduled number prints and the bulls remain in charge with the algo number 6 points above the signal line.

The bull-bear battle is chips versus copper. Bulls feel pretty good about themselves with the semiconductors in their camp and will take the stock market to new highs on stronger copper. Bulls need CPER above 14.93 which represents about a +1.1% gain in copper futures from current levels.

Bears feel pretty good about themselves keeping Doctor Copper in their camp. However, bears got buptkis unless they push the SOX below 1630 (now at 1679 pumping the entire stock market higher). 

The bull party continues if SOX is above 1630 but carnage will begin once it fails. If the SOX loses 1630, and the SPX drops below 2792, Keybot will likely flip short, hence the caution and imminent turn notations remain in the title line. The whipsaw price action continues.

4/26/20; 7:00 PM EST =

4/24/20; 10:00 AM EST = -44; signal line is -50

4/22/20; 12:42 PM EST = -44; signal line is -51; go long 2798; (Benchmark SPX for 2020 = -13.4%)(Keybot algo this trade = -1.6%; Keybot algo for 2020 = +1.9%)(Actual trading results this trade = -3.2%; Actual trading results for 2020 = -3.9%)

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

Keybot the Quant flips back to the long side yesterday at munch time at SPX 2798. The semiconductors were a moonshot out of the gate so the fix, and whipsaw, was in. The price action in the chips is purely machine-driven as evidenced by the minute charts moving up in a straight line. The semi's and retail stocks are the two main drivers of the stock market strength.

Bulls need stronger copper and utilities, and lower volatility, to continue the rally. Bulls need CPER above 14.87 and VIX below 29.80.

Bears need weaker chips, plain and simple. People working from home are creating the near-term demand in chips and the pop in chip-makers. Bears need SOX below 1632 to create stock market weakness. If SOX 1632 fails, and the SPX moves below 2776 trending lower, Keybot will likely whipsaw back to the short side.

For the last trade, that ran all of 8-1/2 hours, the algorithm program loses -1.6% and the actual trading loses -3.2%. Interestingly, the correlations between the 1x and 2x ETF's and their respective indexes are tracking very closely, as they should, another indication of machine-driven markets (typically, the  numbers are all over the map). The sawtooth, whipsaw, choppy stock market, choose your description, chews up bulls and bears alike. In the last nine trading days, the SPX has flipped direction six times. The benchmark S&P 500 is down -13.4% on the year. The Keybot the Quant algorithm program is up a couple percent on the year but the actual trading slips more negative down about four percent this year thus far. Keybot exits SDS and enters QQQ. The robot flips back into single 1x ETF's for the next 35 days due to the whipsaw. The choppy markets chew up the 2x ETF plays so the quant slips back into 1x ETF mode to reduce risk.

It will be interesting to see if another whipsaw occurs. Watch the semiconductors. SOX 1632 dictates stock market direction. Keybot prints a pre-scheduled number tomorrow morning.

4/26/20; 7:00 PM EST =

4/24/20; 10:00 AM EST =

4/22/20; 12:42 PM EST = -44; signal line is -51; go long 2798; (Benchmark SPX for 2020 = -13.4%)(Keybot algo this trade = -1.6%; Keybot algo for 2020 = +1.9%)(Actual trading results this trade = -3.2%; Actual trading results for 2020 = -3.9%)

4/22/20; 9:36 AM EST = -44; signal line is -51 but algorithm remains short

4/21/20; 10:56 AM EST = -60; signal line is -51; go short 2753; (Benchmark SPX for 2020 = -14.8%)(Keybot algo this trade = -3.2%; Keybot algo for 2020 = +3.5%)(Actual trading results this trade = -3.2%; Actual trading results for 2020 = -0.7%)

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

Keybot the Quant flips to the short side yesterday before munch time at SPX 2753. It's all about the chips and retail stocks; the two main drivers of broad stock market direction currently. The caution and imminent turn flags remain out since the market price action is extremely erratic and unstable. The quant may very well flip back to the long side today depending on the semiconductors.

The bears need semi's to remain weak while sending retail stocks lower. Bears need RTH below 113 (now at 116) to create market carnage.

The bulls need the chips and copper to rally to create upside stock market strength. Bulls need SOX above 1620 (now at 1589) and CPER above 14.80 (now at 14.20). So copper needs to gain a little over +4% to help the bulls and the red metal futures are up +1.7% currently so bulls have some work to do there.

Simply watch the semiconductors that hold all the cards. It does not mater which way the broad stock market moves, all that matters is SOX 1620. Stocks may rally strongly but if the chips do not cross above this bull-bear line in the sand, equities will roll back over and die. If stocks rally and SOX 1620 is taken out, the bulls will cheer and ride to victory.

On the last trade, that only ran for a week, both the quant program and actual trading lost -3.2%. The robots are getting beaten up in the whipsaw price action. The benchmark S&P 500, the SPX Index, the United States stock market, is down -15% so far this year. The Keybot the Quant algorithm program is up +4% this year but the actual trading has now slipped negative down about a percent on the year. Keybot exits SPY and enters SDS returning to the double-leveraged ETF's. This is dangerous stuff but the robot does what it is programmed to do; a 35-day whipsaw timer expired so the quant is permitted to use 2x ETF's again (if a whipsaw would occur today the quant would drop back down into 1x ETF's again to reduce risk for another 35 days).

If the SOX moves back above 1620, and the SPX trades above 2786 trending higher, Keybot will likely whipsaw back to the long side, hence the imminent turn notation in the title line. Markets are a coin-flip and a crap-shoot each day. Keybot prints a pre-scheduled number on Friday morning shortly after the markets open.

4/26/20; 7:00 PM EST =

4/24/20; 10:00 AM EST =

4/21/20; 10:56 AM EST = -60; signal line is -51; go short 2753; (Benchmark SPX for 2020 = -14.8%)(Keybot algo this trade = -3.2%; Keybot algo for 2020 = +3.5%)(Actual trading results this trade = -3.2%; Actual trading results for 2020 = -0.7%)
4/21/20; 10:39 AM EST = -60; signal line is -51 but algorithm remains long

4/19/20; 7:00 PM EST = -44; signal line is -51

4/16/20; 9:00 AM EST = -44; signal line is -51

4/14/20; 1:53 PM EST = -44; signal line is -52; go long 2845; (Benchmark SPX for 2020 = -12.0%)(Keybot algo this trade = -1.1%; Keybot algo for 2020 = +6.7%)(Actual trading results this trade = -8.0%; Actual trading results for 2020 = +2.5%)

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

Keybot the Quant flips to the long side yesterday afternoon at SPX 2845. The massive short-covering rally induced by the Federal Reserve sends stocks to the moon. Keybot has been champing at the bit to flip long for a week but the internals of the market remain very weak. This tells you plain as day that the huge rally is another central banker money printing party. Traders are simply buying stocks for a joyride higher on the Fed stimulus. This has been the bull party ride for the last 11 years.

The bulls pumped retail stocks and chips higher to provide the firm enough boost to make the robot flip long. Stay alert for a potential whipsaw back to the short side. S&P futures are down -50 as this is typed about 2 hours before the hump-day opening bell on Wall Street.

Bears need weaker chips and retail stocks. Bears need SOX below 1610 and RTH below 111.50. AMZN is off to the races higher pumping the retail sector higher since everyone is sitting at home these days. Equities may sell off sharply at the opening bell, as the futures suggest, but if SOX remains above 1610, the bears got nothing, and stocks would be expected to reverse to the upside and resume the rally.

Bulls need stronger banks and copper to gather more upside juice for the broad stock market. Bulls need XLF above 23.80 and CPER above 14.97. Both parameters are within striking distance especially copper, however, the banks are stumbling as they kick off earnings season this week; they are yearning for more earnings. Copper futures are tanking -2% right now. Ditto XLF down -2% in early trading. Since the bulls do not appear to have game at the start, they will be playing defense and making sure that the chips and retail stocks remain elevated.

On the last trade that ran for a month, it followed the stock market V bottom path down and back up. Humorously, the entry and exit of the robot is at the relatively same SPX price (2815-2845) but the SH ETF, which is a 1x short play against the S&P 500, got smoked. Traders were using SH as a hedge and they ran for the exits. As stocks rally on the Fed's easy money as usual, a short-covering rally, SH was thrown out the window. Keybot is a smart robot and fortunately was in the 1x ETF. The 2x leveraged short ETF's, such as SDS, were burned at the stake. The algorithm program loses a percent on the last trade while the actual trading loses -8%. SH was taken to the shed out back and beaten with a baseball bat. The quant exits SH and enters SPY remaining in the 1x ETF's to keep risk low. Interestingly, if the algo would have flipped long one day later, it likely would have went back to the 2x ETF's (the 35-day whipsaw timer is about to expire).

There was lots of bragging by authorities that the ETF industry held up great during the crash. The behavior in tickers such as SH show that not to be the case. The thin volume, that then turns into massive volume as everyone runs for the exit, drastically impacts prices. Just think in the weeks and months ahead, as we experience more trouble, the ETF industry may not hold up and the bigshots may be eating their words. Remain very cautious on thinly traded ETF's.

Thus, on the year, the benchmark S&P 500 is down -12%, the Keybot program is up +7% and the actual trading, generated by the algorithm program, is up +3%, outperforming the broad market by +15%. The strange year continues. Keybot prints a pre-scheduled number tomorrow morning. Watch the semiconductors; that SOX 1610 bull-bear line in the sand should tell you the stock market direction story today. SMH is down -1.5% in the pre-market so taking that away from the starting SOX price at 1696 would take it down to 1671. Looks like the bears have lots more work to do.

4/19/20; 7:00 PM EST =
4/16/20; 9:00 AM EST =

4/14/20; 1:53 PM EST = -44; signal line is -52; go long 2845; (Benchmark SPX for 2020 = -12.0%)(Keybot algo this trade = -1.1%; Keybot algo for 2020 = +6.7%)(Actual trading results this trade = -8.0%; Actual trading results for 2020 = +2.5%)

4/13/20; 1:45 PM EST = -44; signal line is -52 but algorithm remains short

4/13/20; 12:36 PM EST = -60; signal line is -52
4/13/20; 12:18 PM EST = -44; signal line is -52 but algorithm remains short

4/12/20; 7:00 PM EST = -60; signal line is -51

4/9/20; 3:55 PM EST = -60; signal line is -50

4/9/20; 10:00 AM EST = -44; signal line is -50 but algorithm remains short

4/8/20; 11:16 AM EST = -34; signal line is -50 but algorithm remains short

4/8/20; 10:34 AM EST = -50; signal line is -50 but algorithm remains short

4/8/20; 9:54 AM EST = -50; signal line is -48

4/8/20; 9:36 AM EST = -50; signal line is -48

4/7/20; 3:56 PM EST = -66; signal line is -48

4/7/20; 3:46 PM EST = -50; signal line is -47

4/7/20; 2:48 PM EST = -66; signal line is -47

4/7/20; 2:41 PM EST = -50; signal line is -46

4/7/20; 11:12 AM EST = -34; signal line is -46 but algorithm remains short

4/7/20; 10:46 AM EST = -50; signal line is -45

4/7/20; 10:32 AM EST = -34; signal line is -44 but algorithm remains short

4/7/20; 10:21 AM EST = -50; signal line is -43
4/7/20; 9:36 AM EST = -34; signal line is -41 but algorithm remains short

4/5/20; 7:00 PM EST = -66; signal line is -41

4/3/20; 9:00 AM EST = -66; signal line is -39

3/31/20; 7:00 PM EST EOM EOQ1 = -54; signal line is -37

3/31/20; 10:00 AM EST = -54; signal line is -35

3/29/20; 7:00 PM EST = -54; signal line is -34

3/27/20; 10:00 AM EST = -54; signal line is -32

3/22/20; 7:00 PM EST = -52; signal line is -31

3/18/20; 9:00 AM EST = -52; signal line is -29

3/15/20; 7:00 PM EST = -52; signal line is -28
3/13/20; 10:00 AM EST = -52; signal line is -28
3/11/20; 9:36 AM EST = -52; signal line is -27; go short 2815; (Benchmark SPX for 2020 = -12.9%)(Keybot algo this trade = -2.1%; Keybot algo for 2020 = +7.8%)(Actual trading results this trade = -3.7%; Actual trading results for 2020 = +10.5%)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the stock market volatility continues. The quant was champing at the bit to go long yesterday but the internal parameters would not fully latch to permit the move and then equities fell apart in the afternoon. The bears continue slapping the bulls around with the algo number 18 points below the signal line. The algo has been quiet in recent days simply idling happily along in the bear camp but yesterday went crazy spitting out nine numbers and threatening to go long.

The bulls are trying to goose semiconductors to create a catalyst to pump the broad stock market higher. At the same time, the bulls are also trying to elevate retail stocks to boost the floundering stock market. Bulls need SOX above 1604 and/or RTH above 110.20. If both parameters turn bullish, and the SPX runs above 2756, Keybot will likely flip long. If one parameter is bullish, and you see it jogging back and forth along the number listed, that is telling you that it is ready to commit to the bull side and a relief rally for equities is likely going forward near term. It is probably unlikely that the robot will flip long today since the SPX likely has to gain about 90 points. However, if several parameters flip long, that may cause the algo to flip long; use the SOX and RTH as the guide. If both flip long that tells you the upside is uber strong for stocks going forward.

If SOX and RTH remain in the bear camp, the stock market remains toast. Crispy-fried.

Stocks are typically bullish through the full moon which occurred last evening, and futures are up, and equities are typically buoyant the two days in front of a three-day holiday weekend. US stocks trade today (hump day) and tomorrow (Thursday) and then will not trade again until after Easter on Monday 4/13/20. Keybot prints a pre-scheduled number tomorrow morning.

If you are a bull and eating franks and beans over the last month, you need to root for higher chips and retail stocks. If the chips are down, and the retail stocks are sporting a frown, well, you need to buy more cans of beans on your next trip to town. Bears need to keep hammering at the daily lows. Yesterday LOD is 2657, only a couple points below the opening price at 2659. S&P futures are catching the strong full moon bid now up +24 about 2 hours before the opening bell.

4/9/20; 10:00 AM EST =

4/7/20; 3:56 PM EST = -66; signal line is -48

4/7/20; 3:46 PM EST = -50; signal line is -47

4/7/20; 2:48 PM EST = -66; signal line is -47

4/7/20; 2:41 PM EST = -50; signal line is -46

4/7/20; 11:12 AM EST = -34; signal line is -46 but algorithm remains short

4/7/20; 10:46 AM EST = -50; signal line is -45

4/7/20; 10:32 AM EST = -34; signal line is -44 but algorithm remains short
4/7/20; 10:21 AM EST = -50; signal line is -43

4/7/20; 9:36 AM EST = -34; signal line is -41 but algorithm remains short

4/5/20; 7:00 PM EST = -66; signal line is -41

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short and idles along each day on the bear path. The bears remain in charge of the stock market with the algo number 25 points below the signal line. April begins sick like the month of March.

The quant signals a housing recession as of 4/3/20. Remember, Keybot signaled a housing recession in July (that was then nullified in August). The robot identified the weakness in the housing sector last summer and the economy and markets were quickly deteriorating (despite the happy talk from the Federal Reserve). This led to the liquidity event in September that scared the H*ll out of Fed Chairman Powell. The Fed stick-saved the markets from freezing-up by printing money overtime non-stop through the end of last year into this year. The QE (quantitative easing) that the Fed says is not QE pumped the stock market to epic heights rewarding America's wealthy that own large equity portfolios. The Fed's action negated Keybot the Quant's housing recession call. As of Friday, however, the housing recession is now back in play. Whatcha gonna do this time rich Uncle Fed? You have already thrown the kitchen sink at the collapsing markets in March.

The stock market bloodbath continues. The bulls need lower volatility to calm things down so a relief rally can develop. Bulls need VIX below 25.70 (now at 46.80). Bulls will also benefit from stronger chips (SOX) and utes (UTIL). Until then, the bears are going to keep using the bull's faces as punching bags.

Good Friday is this week so US markets will be closed. Easter is Sunday. Today is Palm Sunday. Stocks are usually bullish the two days in front of a three-day holiday weekend. The full moon peaks on Tuesday at 10:35 PM EST and equities are typically buoyant through the full moon. Thus, the underlying stock market current is slightly bullish from, say, Tuesday afternoon into the weekend which begins for traders in the US on Thursday at 4:00 PM EST. The coronavirus (COVID-19) situation, however, may have a different plan in store for markets. The Saudi, Russia, USA oil love triangle will also impact market direction.

Fortunately, the quant does not have to think about all that crap since it only sees 1's and 0's. Keybot prints a pre-scheduled number this week on Thursday morning, Holy Thursday, the last day of trading for the four-day week ahead. Markets remain erratic and unstable; the song remains the same. 

4/12/20; 7:00 PM EST =
4/9/20; 10:00 AM EST =

4/5/20; 7:00 PM EST = -66; signal line is -41
4/3/20; 9:00 AM EST = -66; signal line is -39
3/31/20; 7:00 PM EST EOM EOQ1 = -54; signal line is -37

3/31/20; 10:00 AM EST = -54; signal line is -35

3/29/20; 7:00 PM EST = -54; signal line is -34

3/27/20; 10:00 AM EST = -54; signal line is -32

3/22/20; 7:00 PM EST = -52; signal line is -31

3/18/20; 9:00 AM EST = -52; signal line is -29

3/15/20; 7:00 PM EST = -52; signal line is -28
3/13/20; 10:00 AM EST = -52; signal line is -28

3/11/20; 9:36 AM EST = -52; signal line is -27; go short 2815; (Benchmark SPX for 2020 = -12.9%)(Keybot algo this trade = -2.1%; Keybot algo for 2020 = +7.8%)(Actual trading results this trade = -3.7%; Actual trading results for 2020 = +10.5%)

3/10/20; 3:54 PM EST = -20; signal line is -26; go long 2875; (Benchmark SPX for 2020 = -11.0%)(Keybot algo this trade = +11.0%; Keybot algo for 2020 = +9.9%)(Actual trading results this trade = +8.0%; Actual trading results for 2020 = +14.2%)