Saturday, April 25, 2020

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

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