Saturday, September 5, 2020


Keybot the Quant remains short through the Labor Day holiday weekend in the States. US markets are closed on Monday. Keybot prints the pre-scheduled number on Friday morning but did not print any numbers during the trading session. It is rare to see stocks flushed lower the two days before a holiday weekend; that never happens, until now. The VIX remains above the key 28.49 bull-bear line in the sand. VIX came down on Friday to within a  point but that was the best the bulls could do. The bears held their ground.

Next week, the holiday-shortened, 4-day trading week, utilities, volatility and commodities will be running the show. These three parameters control stock market direction currently. VIX 28.49 is key come Tuesday morning. Bears win above and bulls below. VIX will begin at 30.75.

Did you see UTIL finish at 804? As the Apollo 13 crew said, "Houston, we have a problem." The key bull-bear line in the sand for next week is UTIL 806.92 call it 807, that is close enough for gov't work. This tells you that stocks will be negative on Tuesday morning. However, if utilities spike higher at the opening bell, which the bulls must achieve, that will help to stabilize the stock market. The key level for UTIL is 827 the following week and 793 after that. In other words, bulls have to pump utes strongly over the coming days since they will need UTIL above 827 by Friday, 9/11/20, at 4 PM EST.

For next week, if UTIL remains below 807, immediate weakness will occur in the stock market. If UTIL runs above 807, the bulls are battling back and trying to stabilize the stock market and stop it from dropping further. The bulls will then set their sights on 827 by Friday and if they fail, they are in the same negative pickle again for the following week. If UTIL drops below 8 hundo, the stock market will be deteriorating. If UTIL drops below 793 early next week, it is likely lights-out for the stock market and things will get extremely ugly very quickly. If UTIL continues lower through the 750-770 area, the stock market may crash; it would at a minimum trail lower into year end. The caution flag remains out but this will probably disappear if UTIL remains below 807 on Tuesday morning.

9/6/20; 7:00 PM EST =
9/4/20; 9:00 AM EST = +36; signal line is +51
9/3/20; 11:11 AM EST = +36; signal line is +52

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