Monday, September 14, 2020


Keybot the Quant remains short. Right on cue overnight, the semi's and banks are pumped higher on happy deal and partnership talk. The quant idled along today and did not print any numbers. The SPX leaps +1.3% higher but the algo yawns. It's just another one of the Strange Days. 

Stocks gapped-up at the opening bell but Keybot did not bite. It does not mean that the robot is right it only means that it wants to see a little more bull verification. The Federal Reserve 2-day meeting begins tomorrow with Chairman Powell pontificating on Wednesday afternoon. Stocks are typically up about 80% of the time for the day or two going into a Fed meeting.

Bulls need UTIL above 827 and GTX above 1718, stronger utilities and commodities, respectively. The bulls made a bit of headway on both today but cannot yet cross the finish line. Upside fuel will be provided for stocks if the bulls can pump these two parameters higher. If either parameter joins the bull camp, and SPX moves above 3403, Keybot will likely flip long. Also watch the SOX to see if it jogs across the 2135 level as previously explained.

Bears need SOX below 2135, XLF below 24.55 and VIX above 27.60, weaker chips and banks and higher volatility, respectively. SOX was up on the NVDA deal but only a couple percent. Semi's used to soar to the moon on happy news for the sector. Banks will be impacted by the Fed talk. If one of the 3 parameters fail, stocks will take a noticeable dip lower to a new level. If two fail, stocks are in for an extremely ugly day. If all three fail, big trouble ahead, no one will know where the bottom is, panic will begin to fill the air.

Watch utes. If UTIL moves higher, the bulls mean business; they are not only trying to create short-term fuel for the stock market but also guarantee a happy finish into year end. If UTIL drops below 793, the stock market is in big trouble. If UTIL falls below 750 anytime over next 3 weeks, there is a high probability that the stock market will crash.

Tuesday may be a holding pattern day as global traders await Pope Powell to bring the Holy tablets down from on high on hump day and tell everyone how to trade.

9/17/20; 9:00 AM EST =
9/13/20; 7:00 PM EST = +20; signal line is +21

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