STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long through a choppy session. Volatility failed in the early morning then the chips were down, so all looked bleak, but they reversed and then banks rallied so it was all blue skies and rainbows, but then financials are punched in the face into the closing bell sending stocks lower. The bulls remain in control of the stock market waving the volatility and semiconductor banners. VIX is below 26.79 and SOX is above 3084 so the bulls are buying stocks.

The quant may go into a lull period sometimes, like the last couple weeks, but then on any given day the robot can go nutso spitting out numbers faster than Timmy the neighbor kid spitting watermelon seeds. The algo prints 10 numbers today although 2 are pre-scheduled numbers.

The battleground today was the banks as forecasted ahead of time. XLF danced on each side of the bull/bear line in the sand at 35.58, and in the final minutes the bears win sending XLF down to 35.47. If XLF remains below 35.58, the stock market will weaken and the downside selling can be gauged by VIX 26.79 and SOX 3084. If XLF rallies above 35.58 and higher, traders will be buying stocks with both fists.

Higher copper will also help the bulls that need to push CPER above 26.65 (now at 25.97). This equates to a +2.6% rise in copper futures. This is a big ask but watch to see if the bulls can bite off a few smaller copper chunks and eat the +2.6% over a 2 or 3-day period which would add more upside for the stock market.

Thus, bulls need the stronger banks to signal the all-clear for upside orgy time in the stock market. Higher copper will create even more upside. Bears need to send banks and chips lower and volatility higher to create market mayhem.

The bulls are in control of the stock market with the algo number 17 points above the signal line. Today was the last day of May and June trading begins in the morning.

6/5/22; 7:00 PM EST =
6/3/22; 9:00 AM EST =
5/31/22; 7:00 PM EST EOM = +11; signal line is -6
5/31/22; 3:59 PM EST = +11; signal line is -7
5/31/22; 3:28 PM EST = +27; signal line is -8
5/31/22; 2:48 PM EST = +11; signal line is -8
5/31/22; 1:45 PM EST = +27; signal line is -8
5/31/22; 11:40 AM EST = +11; signal line is -7
5/31/22; 10:25 AM EST = -3; signal line is -6
5/31/22; 10:00 AM EST = -19; signal line is -3 but algorithm remains long
5/31/22; 9:39 AM EST = -19; signal line is +0 but algorithm remains long
5/31/22; 3:06 AM EST = -3; signal line is +3 but algorithm remains long
5/29/22; 7:00 PM EST = +11; signal line is +5

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips long at SPX 4127 on Friday morning at 11:43 AM EST. As the previous message told you days before, watch volatility and the chips and they drive the model to flip to the bull side.

It is simple. The bulls need the banks to prove they have more strength and a strong upside orgy would begin. Bulls need XLF above 35.58 and price is at...... wait for it....... wait a bit longer for it ..... 35.57 only one penny away. The XLF tagged 35.59 in the final minute of trading on Friiday but closes below. XLF 35.58 is the parameter to watch since it tells you who wins in the week ahead.

Bears need to keep SOX above 3080 (now at 3115) and VIX below 26.44 (now at 25.72), the 2 parameters that flipped the quant long on Friday, while pushing XLF at least one penny higher. If XLF is higher, the bulls will be throwing confetti watching stocks rally.

If XLF fails at 35.58 and is spanked down, stocks will become soggy. At this point watch the chips and volatility parameters shown. If either one turns bearish, stocks will become negative and if the SOX and VIX both flip back to the bear camp, the stock market will collapse.

So it is that simple; XLF 35.58, SOX 3080 and VIX 26.44. It is all you need to know. If the SOX or the VIX flips bearish, consider the imminent turn to the down side to be in play. If the stock market goes south, watch the SPX 4070-4090 range which likely spells trouble ahead if breached to the downside.

On the last trade that ran for 36 days; about 5 weeks, the quant program gains a big +7% and the actual trading gains a huge +12.5%. For 2022 thus far, the SPX is down -13% while the Keybt the Quant program is up +11% and the actual trading generated by the quant is up +10%. The actual trading flips positive after the -15% deficit a couple months ago a +25% turnaround! The 2x ETF's can punch you in the face but also be rewarding. Keybot the Quant exited SDS and entered SSO.

Today is Memorial Day a time to remember the ones that did not make it home. A salute to these noble brothers and sisters. US markets are closed today and reopen tomorrow for a 4-day trading week. Keybot prints 2 pre-scheduled numbers tomorrow, one for month-end (EOM). Another pre-scheduled number prints on Friday morning.

Banks, chips and volatility tell you everything you need to know. Everything else is noise.

6/5/22; 7:00 PM EST =
6/3/22; 9:00 AM EST =
5/31/22; 7:00 PM EST EOM =
5/31/22; 10:00 AM EST =
5/29/22; 7:00 PM EST = +11; signal line is +5
5/27/22; 11:43 AM EST = +11; signal line is +6; go long 4127; (Benchmark SPX for 2022 = -13.4%)(Keybot algo this trade = +7.3%; Keybot algo for 2022 = +10.7%)(Actual results this trade = +12.5%; Actual results for 2022 = +9.6%)
5/27/22; 10:00 AM EST = -5; signal line is +8
5/27/22; 9:49 AM EST = -5; signal line is +9
5/22/22; 7:00 PM EST = -19; signal line is +11
5/18/22; 9:00 AM EST = -19; signal line is +14
5/17/22; 3:51 PM EST = -19; signal line is +16
5/17/22; 2:46 PM EST = -5; signal line is +18
5/17/22; 2:15 PM EST = -19; signal line is +20
5/17/22; 1:06 PM EST = -5; signal line is +22
5/15/22; 7:00 PM EST = -19; signal line is +24
5/13/22; 10:05 AM EST = -19; signal line is +25
5/13/22; 10:00 AM EST = -19; signal line is +27
5/8/22; 7:00 PM EST = -19; signal line is +29
5/6/22; 9:00 AM EST = -19; signal line is +30
5/1/22; 7:00 PM EST EOM = -19; signal line is +31
4/26/22; 10:00 AM EST = -19; signal line is +33
4/24/22; 7:00 PM EST = -19; signal line is +35
4/22/22; 1:39 PM EST = -19; signal line is +36
4/22/22; 10:13 AM EST = -3; signal line is +37
4/22/22; 9:37 AM EST = +13; signal line is +38
4/21/22; 12:13 PM EST = +27; signal line is +39; go short 4453; (Benchmark SPX for 2022 = -6.6%)(Keybot algo this trade = +0.8%; Keybot algo for 2022 = +3.4%)(Actual results this trade = +1.5%; Actual results for 2022 = -2.9%)

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. A pre-scheduled number prints a few minutes ago with the bears remaining in full control of the US stock market with the algo number 33 points below the signal line. The bears are cruising. The quant comes back to life this week printing 4 numbers in yesterday's session.

The bulls, and the Fed, are trying to push volatility lower and get that jackboot back onto the throat of Uncle Vix keeping him down. The bulls need VIX below 25.90 to confirm that the relief rally is strong and has Legs. The bulls also need stronger chips and must push SOX above 3115.

VIX and SOX tell you if the stock market rally continues, and if it does, how strong it will be. If 1 parameter turns bullish consider the caution flag to be out and if both turn bullish, especially if they jog back and forth across the bull/bear lines in the sand, consider the imminent turn to the long side to be in play.

5/22/22; 7:00 PM EST =
5/18/22; 9:00 AM EST = -19; signal line is +14
5/17/22; 3:51 PM EST = -19; signal line is +16
5/17/22; 2:46 PM EST = -5; signal line is +18
5/17/22; 2:15 PM EST = -19; signal line is +20
5/17/22; 1:06 PM EST = -5; signal line is +22
5/15/22; 7:00 PM EST = -19; signal line is +24
5/13/22; 10:05 AM EST = -19; signal line is +25
5/13/22; 10:00 AM EST = -19; signal line is +27
5/8/22; 7:00 PM EST = -19; signal line is +29

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. The bulls are taken to the shed out back and beaten mercilessly. The bears remain in full control of the stock market with the algo number 48 points below the signal line. The bears are cruising. Bears need weaker utilities and commodities to extend the selling while bulls need lower volatility to halt the selling.

The quant remains in suspended animation only printing the pre-scheduled numbers. This is atypical behavior for the model. The algorithm is pinned into the bear camp except for very few areas such as utes and commodities that remain in the bull camp.

5/15/22; 7:00 PM EST =
5/13/22; 10:00 AM EST =
5/8/22; 7:00 PM EST = -19; signal line is +29
5/6/22; 9:00 AM EST = -19; signal line is +30
5/1/22; 7:00 PM EST EOM = -19; signal line is +31

STOCK MARKET BEARISH -- SHORT

Keybot the quant remains short after the Federal Reserve raises the key rate a half-point. Fed Chairman Powell takes the 75-bip hikes off the table so his comments are viewed as dovish and voila, stocks experience an orgy rally.

The Fed tries to maintain its jackboots on the throat of volatility and despite the wild over 100-point gain in the SPX after the announcement, the VIX remains bearish. Volatility is a metric that should have turned bullish for that magnitude of orgy.

Bears remain in control of the US stock market with the algo number 50 points below the signal line.

The quant has been quiet for over a week. Last week it did not print any numbers except for the pre-scheduled number. This week Keybot has not printed any numbers either. Status quo. Technical damage remains in play despite yesterday's happy day.

Chips and volatility tell you if the rally has legs going forward. Bulls need SOX above 3187 (now at 3164) so any semiconductor news is uber importante. Bulls need VIX below 24.64 (now at 26.07 with S&P futures down -20). Even if these 2 parameters flip into the bull camp, Keybot the Quant may still not flip long. The NYA index will come into play if chips and volatility extend the rally.

The bears simply need to prevent the chips and volatility from turning bullish and that will guarantee more stock market misery ahead.

5/8/22; 7:00 PM EST =
5/6/22; 9:00 AM EST =
5/1/22; 7:00 PM EST EOM = -19; signal line is +31
4/26/22; 10:00 AM EST = -19; signal line is +33
4/24/22; 7:00 PM EST = -19; signal line is +35