Sunday, March 7, 2021


Keybot the Quant remains short. The bears are in charge of the stock market direction currently with the algo number 35 points below the signal line. It is surprising with the rally on Friday that the algo number did not gain ground higher. Bears need weaker banks and copper to create more downside pressure. These two sectors are very strong.

The US Senate approves the $1.9 trillion Christmas package so the week ahead will either show upside celebration or a sell-the-news event, or both.

Volatility, chips and utes are the Three Stooges controlling the stock market show right now. Bulls need either VIX below 24.20, SOX above 2985 and/or UTIL above 824.30. All three are in striking range and if the three flip the model will likely flip long immediately. You can gauge the strength in the stock market with these parameters.

If all three remain bearish and the banks and copper weaken, the next big leg lower in the stock market will begin. If 1 of the 3 parameters turn bullish, any one would do, the stock market selling will immediately stop and stocks will stabilize. Consider the caution flag out if this occurs. If 2 of the 3 turn bullish, and that would likely be vol and semi's, consider the imminent turn to the long side to be in play and if the SPX moves above 3852 trending higher, Keybot will likely flip long. As mentioned, if all 3 parameters turn bullish, Keybot will likely flip long immediately.

Keybot prints one pre-scheduled number this week on Friday morning. The beat goes on.

3/14/21; 7:00 PM EST =
3/12/21; 10:00 AM EST =
3/7/21; 7:00 PM EST = +2; signal line is +37
3/5/21; 9:00 AM EST = +2; signal line is +39
3/3/21; 3:58 PM EST = +2; signal line is +42
3/3/21; 2:58 PM EST = +18; signal line is +44
3/3/21; 2:27 PM EST = +2; signal line is +47
3/3/21; 7:34 AM EST = +18; signal line is +49
3/1/21; 9:38 AM EST = +32; signal line is +51

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