Sunday, August 9, 2020


Keybot the Quant remains long. The bulls finally manage to drag the utilities into their camp on Friday morning so you knew stocks would recover and they did with the SPX finishing positive by a couple points. UTIL blew through the 835.52 bull-bear line in the sand finishing the week up at 843. The strength in utilities is an indication that the bulls can keep stocks elevated into year end. Bulls are cruising along without a care in the world with the algo number 26 points above the signal line.

Are the bulls whistling past the graveyard? This is a fascinating time in markets. At no other time in recent history do you have the technicals lining up negatively, under an ongoing complacent, fearless and euphoric stock market (all topping behavior), but Keybot, that only sees 1's and 0's, remains pedal to the metal long without concern. Something will likely give at anytime and the resulting price action may be historic.

The two parameters most greatly impacting stock market direction currently are utilities and copper. The red metal comes back onto the radar screen for the quant. Keybot is tracking CPER identifying 17.18 as a key bull-bear line in the sand. The stock market rally is over and downside sogginess will begin for equities if CPER loses 17.18. This represents a -1.666% drop from current price so you can watch the copper futures overnight to see if they can muster-up a -1.7% slide to help the bears.

Bulls are throwing confetti each day and drinking Fed wine as long as UTIL remains above 835.52. The stock market will be in trouble if 835 fails. Equities will be in serious trouble on an intermediate basis if UTIL loses 800. If UTIL loses the 750-760 area over the next month, the US stock market will be weaker into year-end and may potentially crash. With UTIL way up at 843, the bulls scoff at such outlandish outcomes.

The bears likely need both UTIL to lose 835.52 and CPER to lose 17.18 for the model to flip short so you can see why the bulls are happy. Commodities are also important. Keep an eye on the GTX 1696 bull-bear line in the sand.

Keybot prints one pre-scheduled number this week on Friday morning. The bulls are set up nicely at +69. It is the Summer of 69.

8/16/20; 7:00 PM EST =
8/14/20; 10:00 AM EST =
8/9/20; 7:00 PM EST = +69; signal line is +43
8/7/20; 10:44 AM EST = +69; signal line is +41
8/7/20; 9:00 AM EST = +53; signal line is +40

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