Monday, July 6, 2020


Keybot the Quant remains long as the last of the smoke from the fireworks dissipates and Scruffy the dog eats the remaining hotdog on the grill. The Independence Day holiday is over and hung-over traders are back at their desks. The bulls are joyous to begin the second half of the year. Asia is happy. Everyone is euphorically bullish knowing that central banks will always support stocks, to protect the wealthy class, so there is no worries ahead (moral hazard).

The bulls pumped utilities last week creating broad market lift. UTIL 759 is a key bull-bear line in the sand this week. UTIL price was pumped to the 787 palindrome on Friday to give the bulls the upper hand in the stock market. Next week the comparison number for utilities becomes even easier for bulls at UTIL 706 but the week after, starting 7/20/20, UTIL must be above the 828 palindrome or there will be stock market trouble. So watch the closing print for UTIL on Friday, 7/17/20, at 4 PM EST; write it down on a sticky note so you remember, since it will provide a heads-up for market direction the following week. Bulls look okay at 787 right now well above this week's 759 line in the sand but keep an eye on it as the week progresses. The stock market will weaken if 759 fails this week.

The quant is identifying banks and commodities as the major drivers of market direction currently. Bulls need stronger banks while bears need weaker commodities. Bulls need XLF above 23.21 (now at 22.97 only pennies away) to ignite the upside in the stock market.

Bears need GTX below 1679 (now at 1688 only a few dollars away) to create stock market selling. A weaker dollar will send commodities higher. Oil is up in early trading. S&P futures are up +40. In very early trading, XLF sneaks higher to 23.08. If the futures hold and stocks receive a big pop at the opening bell to begin the new week of trading after the holiday, watch XLF. If XLF does not take out 23.21, then the bulls got nothing and the stock market will roll over lower. If XLF moves above 23.21, it is party-time for the bulls.

Keybot does not print any pre-scheduled numbers this week. Last Thursday was a very active session before the holiday with the robot printing 8 numbers including the pre-scheduled number. The bulls are in charge of the stock market with the algo number 17 points above the signal line. Bears likely need to push GTX under 1679 and let it jog above and below this level a couple times or so to position the quant to go short; at that point the bears would also need the SPX to trade below 3125 to cause the algo to go short.

7/12/20; 7:00 PM EST =
7/5/20; 7:00 PM EST = +26; signal line is +9
7/2/20; 1:11 PM EST = +26; signal line is +8
7/2/20; 12:42 PM EST = +12; signal line is +7
7/2/20; 11:58 AM EST = +26; signal line is +7
7/2/20; 10:51 AM EST = +12; signal line is +7
7/2/20; 10:28 AM EST = +28; signal line is +8
7/2/20; 9:38 AM EST = +42; signal line is +8
7/2/20; 9:36 AM EST = +28; signal line is +6
7/2/20; 9:00 AM EST = +12; signal line is +6
7/1/20; 10:41 AM EST = +12; signal line is +5
7/1/20; 9:40 AM EST = +28; signal line is +5
6/30/20; 7:00 PM EST EOM EOQ2 EOH1 = +12; signal line is +4

Note Added 4:36 AM EST: XLF catapults +2.5% higher to 23.55 in the pre-market so the fix is in. Bulls are throwing confetti and singing songs of joy. It is still thin volume stuff but the bulls know what they have to do today and are focused on pumping the banks.

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