Friday, July 17, 2020


Keybot the Quant remains long as the market drama continues. The bulls are in charge with the algo number 22 points above the signal line. Banks rally and volatility drops so the bulls are walking around with their chests puffed out as stocks remain strong.

There are only two major parameters that are bearish currently; the NYA index and utilities. Bulls need the NYA above 12482 (now at 12350) which would be a bigtime bullish signal. Equities will run strongly higher if it happens so watch it closely. If NYA stalls here, it will be time for the bears to fight back.

Utilities are key. As previously explained, the key bull-bear lines in the sand, there are two of them, for all of next week are 827.83 and 835.15. Memorize these numbers since they will dictate whether the stock market marches sideways to sideways higher into the end of the year, or, if equities will fail and fall apart into EOY. UTIL begins Friday morning trading at 809.52. This is major drama.

If UTIL ends the day and week at 4 PM EST above 827.83, the bulls are in clover to begin next week and equities should remain buoyant and floating higher. If UTIL closes today above 835.15, equities will remain elevated through the end of the year; the bulls will be joyous going forward.

If UTIL closes below 827.83 today, the stock market will be in trouble out of the gate come Monday morning. If UTIL finishes negative on the day today, take that as a very negative signal for the stock market going forward. If UTIL ends the day sub 800, the stock market will be in major trouble next week. Thus, check the number at 4 PM EST and see which scenario it falls into.

Bears cannot get any downside traction due to the constant happy talk by the crony capitalism handlers. The vaccine news created a pump this week, Madame Lagarde was pumping yesterday, other central banks chime in saying they will keep pumping and to make sure stocks can stay buoyant into the weekend, President Trump promises a payroll tax cut overnight so he is pumping all evening long. S&P futures are +9 with the VIX at 28.00 about six hours before the opening bell on Wall Street.

Bears must prevent that NYA 12482 from occurring with all their might, if not, they are toast. Bears must also stab utilities lower from here forward which would be a sign of not only short term trouble but equity selling into EOY. Bears will benefit with weaker commodities. Bears need GTX below 1679 (now at 1706) to create stock market sogginess.

Keybot prints a pre-scheduled number before the opening bell and another one after. The quant has been quiet this week only printing two numbers thus far. Perhaps Friday will bring fireworks?

The bottom line is that the bulls will catapult stocks into the stratosphere if they can attain NYA 12482 or the UTIL 828 palindrome. Bears win if GTX loses 1679. The bears likely need both GTX to fail and XLF to fail below 23.35 to place the quant in position to go short so that may depend on bank earnings today and if traders begin selling the news, or not. Watch the utilities. It cannot be overstated how important the UTIL 828 line in the sand is today.

7/19/20; 7:00 PM EST =
7/17/20; 10:00 AM EST =
7/17/20; 9:00 AM EST =
7/14/20; 9:44 AM EST = +42; signal line is +20

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