Saturday, September 19, 2020


Keybot the Quant remains long as a bull trap is sprung on Wednesday and a bear trap on Friday. On 9/16/20, stocks were jammed higher with the party in full swing during the afternoon. Bulls jump aboard the stock market that is heading higher. Thwack. The bulls heads are delivered on a platter as the SPX drops from 3430 to 3332 on Thursday. On 9/18/20, the bears are emboldened salivating that the selloff has finally arrived and begin going short like madmen. Thwack. The bears heads are delivered on a platter after the SPX bottoms at 3292 on Friday and ends the day at 3319 (nonetheless, the SPX does finish down -1.1% on Friday).

The quant prints five numbers on Friday including the pre-scheduled number. Keybot was champing at the bit to go short but the internal parameters would not fully latch to permit the move. Then, late day, stocks recover and the robot is back in the bull camp with the algo number 11 points above the signal line. In a rare oddity, which also occurred a couple weeks or so ago, the S&P 500 is down big say -30 to -50 points but the VIX is also down. That simply does not happen to that extreme extent and now twice in recent days. Something is happening here.

UTIL ends at 798. Bulls are happy since UTIL must be above 793 for the week ahead. This provides bulls an advantage come Monday morning. The bears need to push UTIL below 793 as soon as possible and lower over the next couple weeks to prove that a longer term stock market selloff is ahead.

9/20/20; 7:00 PM EST =
9/18/20; 1:53 PM EST = +34; signal line is +23
9/18/20; 1:50 PM EST = +20; signal line is +22 but algorithm remains long
9/18/20; 1:42 PM EST = +4; signal line is +22 but algorithm remains long
9/18/20; 1:32 PM EST = +18; signal line is +22 but algorithm remains long
9/18/20; 10:00 AM EST = +34; signal line is +22
9/17/20; 3:15 PM EST = +34; signal line is +21

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