Sunday, September 13, 2020


Keybot the Quant remains short. The algo was active on Friday printing 8 numbers. The chips and volatility are the two most important parameters impacting stock market direction currently so that is what you want to watch on Monday. The bears are in control but the algo number is only 1 point below the signal line, hence the imminent turn to the bull side is in play.

Bulls need stronger utilities and must push UTIL above 827 this week beginning at 8 hundo. This is a tall order but doable. Next week, the UTIL 827 no longer matters and instead 793 will be the key line in the sand. Therefore, bulls need UTIL to move higher and at a minimum remain above 793 by week end. Utes are a gauge for how bad the stock market selloff will be. As equities move lower, if UTIL remains above 793 over the next three weeks, the bears do not have much gusto and the selling event will end and a nice strong relief rally will follow. If, however, utes keep dropping, and UTIL goes sub 793 and in a week or two travels sub 750-760, the stock market will begin trailing significantly lower into year end and a crash will be on the table.

Bulls need stronger commodities and to push GTX above 1720. The bulls have a tough road ahead to pump those utes and commodities higher, therefore, the hoofed ones will probably focus on jogging the semiconductors.

Bears need SOX under 2133 (now at 2136) and the stock market will take a significant leg lower. This story will be told at the opening bell. Watch the chips in the pre-market. If 2133 fails, stocks are toast. If 2133 fails, but a few minutes later or a half hour or hour later, price comes back above, and then after a little bit, falls back below 2133 (jogging), that tells you the bulls are gathering strength to start a relief rally.

If the SOX is jogged once or twice across the 2133 line in the sand, and then begins moving higher and higher above 2133, and if the SPX then moves above 3367, Keybot will likely flip long.

Bears need weaker banks and to push XLF below 24.52 (now at 24.71) which will create market carnage. Bears need higher volatility and must push VIX above 28.11 (now at 26.87 creating bullishness) to guarantee selling pressure ahead.

Thus, bulls need stronger utes, commodities, chips and banks and lower volatility. Maintaining SOX above 2133 will keep the bulls at bat (stocks will move sideways with a slightly higher bias).

Bears need weaker utes, commodities, semi's and banks and higher volatility. SOX losing the 2133 level would be the bears ticket to glory on Monday (stocks will drop like rocks). These are historic times. If you are new to trading, markets or economics, you are witnessing rare stuff occurring. If chips and banks both fail out of the gate tomorrow, a Black Monday may be on tap.

Keybot prints two pre-scheduled numbers this week one on Thursday morning and the other on Friday morning. Watch the chips closely on Monday. Listen for any news concerning semiconductors out of Asia and Europe overnight. Also the banks.

9/20/20; 7:00 PM EST =
9/18/20; 10:00 AM EST =
9/17/20; 9:00 AM EST =
9/13/20; 7:00 PM EST = +20; signal line is +21
9/11/20; 3:25 PM EST = +20; signal line is +23
9/11/20; 3:06 PM EST = +4; signal line is +24
9/11/20; 2:38 PM EST = +20; signal line is +26
9/11/20; 2:20 PM EST = +4; signal line is +27
9/11/20; 1:09 PM EST = -10; signal line is +29
9/11/20; 10:26 AM EST = +20; signal line is +31
9/11/20; 10:02 AM EST = +6; signal line is +33
9/11/20; 9:51 AM EST = +20; signal line is +35
9/10/20; 1:45 PM EST = +6; signal line is +36

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.