STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the SPX prints another all-time record high at 3740.51 and all-time record closing high at 3723.03 both on 12/28/20. The bulls are trying to end the year with a bang. The quant remains quiet for the last month mainly printing the pre-scheduled numbers along with some pops and drops in volatility. The bears are in control of stock market direction, despite the new record highs printing, but the algo number is only 2 measly points below the signal line. Markets remain a toss-up.

The algo will be rezeroed as always as the year changes. The current trade does not change. The data is simply split and separated to keep the weeks, months and years in line ending 2020 and starting 2021. It was a banner year for the quant that has never registered a down year since it went live with the actual trading a decade ago.

Utilities are at an interesting juncture with UTIL at 849. If UTIL fails at 829, stocks will be in serious trouble going forward into the intermediate term (weeks and months). Last week, UTIL fell to 836 teasing trouble. The other moving part is that utilities must rally going forward; staying sideways is not good enough. If UTIL falls through 829, it is bad news for equities. For this week, if UTIL loses 798 (after the 829), it is lights-out for stocks. For next week the week of 1/4/21, the first trading week of the year, stocks will fall apart if 829 then 808 fails. For the next week of 1/11/21, stocks will drop like rocks if 832 fails then 829. Note that. For the week of 1/18/21, stocks are in trouble if 876 fails then 829. Is that clear as mud? Focus on the first number that would need to fail to make for happy bears and that would be 829 for this week and next but 832 for the week of 1/11/21 and 876 for the week of 1/18/21. Price is at 849 right now. Thus, it is not only about utes potentially failing over the next couple weeks, but also in about 2 or 3 weeks time. UTIL has to be above 876 and moving higher by mid-January. Do you think that is going to happen? Watch utes. They will tell you a lot about stock market direction ahead. If both numbers fail in a given week, consider that to signal that a trap-door is open on the stock market and it is very likely stocks would collapse into free fall, perhaps flash crash-ish.

Bears need VIX above 25.14 to do any market damage. VIX is at 21.44 currently. S&P futures are up +17 about 4-1/2 hours before the opening bell in the states. The Fed maintains its jackboots on the throat of volatility keeping it down to keep the wealthy happy. Bears also need RTH below 155.20 to create market mayhem (RTH is at 157.12). Two sticks is about a -1.4% drop in RTH where AMZN is the major component. Keep an eye on Scamazon.

12/31/20; 7:00 PM EST EOM EOQ4 EOH2 EOY2020 =
12/27/20; 7:00 PM EST = +67; signal line is +69
12/23/20; 10:00 AM EST = +67; signal line is +69
12/22/20; 10:00 AM EST = +67; signal line is +68

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant is short with the algo printing one number in the Tuesday session. The bears are in control of the stock market direction albeit the algo number is only 1 single point below the signal line.

Bears need to push the VIX above 25.31, or RTH below 154.73, or UTIL below 830, to create market mayhem. The amount of selling is proportional to whether one, two or all three parameters fail. VIX is at 23.40 so bears need a couple-point pop. A failure of the utilities will be a significant development for the stock market since it will hint that the selling next year will be very long term multi-month or longer.

It is interesting that despite the all-time record highs in stocks, the bulls do not have much fuel to move higher. The SPX needs to push above 3698 which would provide another spurt above 3700 but that may be short-lived. Consumer Sentiment is released this morning and it is critical for bulls that it be a strong number moving higher. A weak number may start to roll the markets over to the downside. The SPX begins the day at 3687 so +11 points are needed to make for happy bulls and S&P futures are up, well, +11. Of course they are. 

Watch VIX 25.31 and RTH 154.73 to see if the bears got game. Watch AMZN since it will greatly impact RTH.

12/27/20; 7:00 PM EST =
12/23/20; 10:00 AM EST =
12/22/20; 10:00 AM EST = +67; signal line is +68
12/22/20; 3:22 AM EST = +72; signal line is +68 but algorithm remains short

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is on the short side but the bulls are bouncing back as the Fed maintains its jackboots on the throat of volatility. The quant wants to flip back to the long side with the algo number 4 points above the signal line.

If the SPX moves above 3703 after the opening bell and trending higher, Keybot will likely flip back to the long side. The SPX begins the day at 3695. Look at that. S&P futures are up +8. Of course they are. The bulls are going to make a run for it.

VIX drops to 23.55. Bears need VIX above 25.33 so they got their work cut out for them. The stock market will deteriorate if the VIX moves above 25.33. If VIX remains below 25.33, the bulls will regain control of the stock market and begin pushing higher again.

12/27/20; 7:00 PM EST =
12/23/20; 10:00 AM EST =
12/22/20; 3:22 AM EST = +72; signal line is +68 but algorithm remains short
12/22/20; 3:06 AM EST = +58; signal line is +67
12/21/20; 12:33 PM EST = +72; signal line is +68 but algorithm remains short

STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant flips to the short side today at SPX 3644. Volatility sent stocks lower but everything has since recovered anticipating a positive vote in Congress for the stimulus bull. The quant is already champing at the bit to go long again, hence the imminent turn notation in the title line, but the S&P 500 will need to be positive on the day to make that happen.

VIX is at 24.41; the Fed is jamming it lower to help equities recover. VIX 25.32 is the bull-bear line in the sand. Bears need VIX above 25.32 or they got buptkis. If the VIX remains sub 25.32, stocks will recover and the quant will probably whipsaw back to the long side.

If the VIX moves above 25.32, it proves the bears mean business and the stock market will likely begin falling hard. If RTH loses 154.72, that will flush stocks south. Ditto UTIL below 830.

On the last trade, that ran for about 6 weeks, with quiet action the last 3 weeks, the algo computer model gains +9% and the actual trading gains a huge +18%. The S&P 500 benchmark index, which is the US stock market, is up +13% this year with only a couple weeks remaining. Keybot's algorithm program is up a huge +33% on the year and the actual trading, which the model generates, is up an astounding +62% this year. Fibonacci would be proud. Keybot exits SSO and enters SDS remaining in the 2x leveraged ETF's.

Price action remains erratic and extremely unstable. VIX 25.32, RTH 154.72 and UTIL 830 tells you everything you need to know about the stock market direction ahead.

12/27/20; 7:00 PM EST =
12/23/20; 10:00 AM EST =
12/21/20; 12:33 PM EST = +72; signal line is +68 but algorithm remains short
12/21/20; 10:06 AM EST = +58; signal line is +67; go short 3644; (Benchmark SPX for 2020 = +12.8%)(Keybot algo this trade = +8.5%; Keybot algo for 2020 = +32.5%)(Actual trading results this trade = +17.8%; Actual trading results for 2020 = +61.8%)
12/21/20; 3:41 AM EST = +58; signal line is +67 but algorithm remains long
12/20/20; 7:00 PM EST = +72; signal line is +66
12/17/20; 9:00 AM EST = +72; signal line is +63
12/13/20; 7:00 PM EST = +72; signal line is +61
12/11/20; 10:00 AM EST = +72; signal line is +58
12/6/20; 7:00 PM EST = +72; signal line is +56
12/4/20; 9:00 AM EST = +72; signal line is +53
11/30/20; 7:00 PM EST EOM = +72; signal line is +51
11/29/20; 7:00 PM EST = +72; signal line is +49
11/25/20; 10:00 AM EST = +72; signal line is +46
11/24/20; 10:00 AM EST = +72; signal line is +43
11/22/20; 7:00 PM EST = +73; signal line is +41
11/18/20; 9:00 AM EST = +73; signal line is +38
11/15/20; 7:00 PM EST = +73; signal line is +36
11/13/20; 10:00 AM EST = +73; signal line is +35
11/12/20; 3:59 PM EST = +73; signal line is +34
11/12/20; 2:06 PM EST = +59; signal line is +33
11/10/20; 10:56 AM EST = +73; signal line is +32
11/10/20; 10:43 AM EST = +59; signal line is +31
11/9/20; 9:36 AM EST = +73; signal line is +31
11/8/20; 7:00 PM EST = +59; signal line is +31
11/6/20; 10:16 AM EST = +59; signal line is +31
11/6/20; 9:53 AM EST = +45; signal line is +31
11/6/20; 9:00 AM EST = +59; signal line is +32
11/5/20; 9:30 AM EST = +59; signal line is +32
11/5/20; 4:53 AM EST = +73; signal line is +32
11/4/20; 11:48 AM EST = +59; signal line is +32
11/3/20; 9:56 AM EST = +45; signal line is +32; go long 3360; (Benchmark SPX for 2020 = +4.0%)(Keybot algo this trade = +1.8%; Keybot algo for 2020 = +24.0%)(Actual trading results this trade = +1.4%; Actual trading results for 2020 = +44.0%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long. The stock market is pegged at new record highs since traders believe the fiscal stimulus bill will be announced any minute. The SPX prints a record high at 3699.20 and record closing high at 3699.12 both on Friday, 12/4/20, after the US Monthly Jobs Report was a miss. Traders celebrate poor data since the Fed will have to keep printing easy money which sends stocks higher. The bulls are in charge with the algo number 16 points above the signal line.

If the bears start to growl it will likely be with weaker retail stocks and utilities and higher volatility. Bears need RTH below 154.20, UTIL below 831 and/or VIX above 25.28, respectively. Any one of these parameters will end the upside rally and the bears will begin clawing themselves forward. The caution flag is out to begin the week.

The bulls are partying as long as these three parameters remain bullish. AMZN is in RTH so keep an eye on it. Keybot prints one pre-scheduled number this week on Friday morning.

12/13/20; 7:00 PM EST =
12/11/20; 10:00 AM EST =
12/6/20; 7:00 PM EST = +72; signal line is +56
12/4/20; 9:00 AM EST = +72; signal line is +53
11/30/20; 7:00 PM EST EOM = +72; signal line is +51

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long as the algo quietly motors through another week. The SPX prints a new all-time high at 3678 yesterday and new all-time closing high today at 3669. The pre-scheduled number prints but the quant does not print any other numbers as yet this week. The bulls have the market parameters pegged to the ceiling.

The bulls are in charge of market direction with the algo number 21 points above the signal line. Bears need the VIX above 25.50 but the bulls have it down at 21.17. Bears would also benefit from weaker retail stocks and utilities. The bulls enjoy another beautiful day at Itchykoo Park.

12/6/20; 7:00 PM EST =
12/4/20; 9:00 AM EST =
11/30/20; 7:00 PM EST EOM = +72; signal line is +51
11/29/20; 7:00 PM EST = +72; signal line is +49