Tuesday, December 29, 2020


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

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