Tuesday, January 12, 2021


Keybot the Quant remains long as stocks chop along. The quant did not print any numbers in the Monday session. The bulls are in charge with the algo number only 4 points above the signal line. Equities were weak on Monday but the VIX and UTIL remain in the bull camp so the downside was no biggie. S&P futures are up +10 early Tuesday morning.

The quant is identifying volatility, utilities and copper as the three key drivers of stock market direction currently. All three are in the bull camp which maintains buoyancy in the stock market. Bears need VIX above 25.20, UTIL below 832.49 and CPER below 21.47. The ute bull/bear line in the sand is -1.2% below the current price so the bears are in striking distance to make a statement if they want. The copper line in the sand is -2.3% below current levels but copper futures are up +2% this morning so bears will need about a -4% drop in the red metal's futures from current prices to create stock market negativity.

If UTIL loses 832.49, the stock market is in big trouble. If UTIL 825 then fails (note this is lower than the previous 827), it is lights out. Stocks could go into free fall. Bulls must push UTIL above 876 by the end of the week since this number is key for all of next week. If UTIL fails to finish the week above 876, that tells you the stock market will take a leg lower next week.

Volatility and utilities are key; watch VIX 25.20 and UTIL 832.49 closely. VIX is trading at 23.57 down this morning consistent with the lift in the S&P futures. Bulls are okay as long as the three parameters remain bullish. If any one turns bearish, and it probably would be volatility first, and if the SPX moves below 3789 trending lower, Keybot the Quant will likely flip short, hence the imminent turn notation in the title line.

The bulls are getting a better bid now with S&P futures up +14 and the VIX at 23.25. Bears need a two-stick move in vol if they want to growl.

1/17/21; 7:00 PM EST =
1/15/21; 10:00 AM EST =
1/10/21; 7:00 PM EST = +67; signal line is +63

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