Monday, February 1, 2021


Keybot the Quant remains short with the algo number 37 points below the signal line. The bears growled into the weekend but the bulls are back in town this morning with S&P futures up +32.  Banks and retail stocks create the mayhem Friday afternoon so those would be the two that would reverse if the bulls got game.

Bears need weaker copper to create more stock market negativity. A -0.9% drop in copper futures would do it but copper is rallying up +0.4% so the red metal will need to drop -1.3% from the current price to provide bear fuel.

Bears need UTIL below 822.43 which is a trap-door for stocks. Brutal mayhem occurs in the stock market if this level fails.

Bulls need XLF above 29.09 and RTH above 157.77 to try and right the ship. These may be doable considering this morning's joy. Congress is trying to reach agreement on a stimulus bill so futures are higher after the negotiators share a pizza on the weekend. At least all humans can agree on one thing; pizza.

Thus, if banks and retail stocks turn bullish (watch AMZN), consider the caution flag to be in play. If the VIX drops below 25.00, the bulls are going to celebrate with a big move higher and the quant will likely flip long. VIX is trading now at 31.51.

If stocks rally today, the first day of February trading, catapulting to the stratosphere, it does not mean buptkis unless the VIX drops below 25.00. The stock market can rally and look strong all it wants, but if the VIX does not drop below 25.00, stocks will clutch their chest and fall to their knees, and eventually keel over, going forward.

Bulls win with XLF 29.09, RTH 157.77 and VIX 25.00. Tic-tac-toe. Keybot will probably flip long immediately if this happens (all 3).

Bears win with about a -1% drop in copper futures and UTIL under 822.43 which would create a disastrous outcome for the stock market. Keybot prints one pre-scheduled number this week on Friday morning before the opening bell. Tomorrow is Groundhog Day and Punxsutawney Phil is only a stone's throw away from the quant's hideaway. We find out if there is 6 more weeks of winter, or not.

2/7/21; 7:00 PM EST =
2/5/21; 9:00 AM EST =
1/31/21; 7:00 PM EST EOM = +6; signal line is +43
1/29/21; 12:21 PM EST = +6; signal line is +45

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