Sunday, July 12, 2020


Keybot the Quant remains long. The bulls poked a stick into the bear's eyes at 1 PM EST Friday afternoon goosing the banks. Bank earnings are on tap in the week ahead so investors must expect happy results. As banks go, so goes the stock market.

The bulls need NYA above 12497 (now at 12076) which will unleash super bullishness and record equity prices ahead.

The bears need weaker banks and commodities. Bears need XLF under 23.19 (now at 23.46) and GTX under 1681 (now at 1708). Both parameters likely need to turn bearish to cause the quant to flip short.

Thus, bulls are cheering for strength in the NYA index while bears are cheering for weaker banks and commodities. These three parameters are currently dictating broad stock market direction.

Watch the utilities. UTIL is at 791 way above the key bull-bear line in the sand this week at 706. This helps create buoyancy in equities. Next week, the week of 7/20/2020, the key bull-bear line in the sand is the UTIL 828 palindrome. The other key bull-bear line in the sand for this week and next is 835.27-ish. So there it is. UTIL 835 is important this week and 828-835 next week. If UTIL crosses above these levels, the stock market is going to rally bigtime and the off-the-charts euphoric bullishness in the markets right now would be justified. If, however, UTIL stalls in here, and begins slip-sliding away, stocks are in major trouble and a potential crash will be on the table. Now do you understand the importance of the utilities and the levels mentioned? Watch UTIL 835 this week and 828 and 835 next week since they will dictate the intermediate path (weeks and months) ahead for the stock market. Check the closing price for UTIL at 4 PM EST Friday afternoon and compare it to the 828 line in the sand for next week since it will give you a heads-up on stock market direction for that week. The behavior in the utilities over the next two weeks will likely dictate whether the US stock market trends higher into year end, or lower.

Keybot prints two pre-scheduled numbers this week both on Friday morning. Bulls will be happy if banks remain well bid. Bears need to slap the NYA lower.

7/19/20; 7:00 PM EST =
7/17/20; 10:00 AM EST =
7/17/20; 9:00 AM EST =
7/12/20; 7:00 PM EST = +42; signal line is +17
7/10/20; 12:55 PM EST = +42; signal line is +16
7/8/20; 10:14 AM EST = +26; signal line is +14

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