STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short as the stock market reacts to every news bite. Volatility and the utilities are running the show currently. Bulls need VIX below 27.00 (now at 27.23) to signal the all-clear for more upside fun. VIX begins trading at 3 AM EST so volatility will tell you early-on how the US trade is going to go.

Bears need UTIL below 952.30 to reopen the trap-door for US stocks. UTIL begins at 953.63 only pennies away in the bull camp but this can change at the opening bell. The stock market will deteriorate if UTIL loses 952.30. If utilities rally, the bulls must next push UTIL above 983 to create more upside fuel for stocks. This number is in play all week and then becomes worse for bulls at UTIL 1017 for next week (the week of 7/5/22 after the holiday).

In other words, UTIL has to rally this week from 953 to 1017 by 4 PM EST Friday, otherwise, there is likely Hell to pay. Utes will tell you a lot about the stock market this week. If utilities rally strong and start moving towards 1000 that will be a strong bullish signal for stocks. The numbers get hard for UTIL to meet, however, over the next month. Thus, an epic and historic stock market crash may occur in the stock market over the next month. UTIL will provide guidance.

If UTIL rallies, but the VIX remains above 27, the bulls got nothing and utes will likely roll over and die. If VIX drops under 27 out of the gate in the middle of the night, it will set up party-time for the US stock market for Monday.

Keybot the Quant likely needs more than the VIX turning bullish to flip long but if VIX goes sub 27, Monday may develop into a very bullish day. The bears are cruising with the algo number 25 points below the signal line.

The Independence Day holiday is next weekend and stocks are typically buoyant into a 3-day holiday weekend (Thursday and Friday). Keybot prints 2 pre-scheduled numbers this week one on Tuesday the other Thursday. June ends on Thursday which is EOM, EOQ2 and EOH1. End of first half and end of quarter window dressing may help bulls.

7/3/22; 7:00 PM EST =
6/30/22; 7:00 PM EST EOM EOQ2 EOH1 =
6/28/22; 10:00 AM EST =
6/26/22; 7:00 PM EST = -35; signal line is -10
6/24/22; 3:23 PM EST = -35; signal line is -7
6/24/22; 3:00 PM EST = -21; signal line is -5
6/24/22; 1:48 PM EST = -37; signal line is -4
6/24/22; 10:00 AM EST = -51; signal line is -2
6/19/22; 7:00 PM EST = -51; signal line is +1
6/16/22; 9:00 AM EST = -51; signal line is +3
6/13/22; 10:48 AM EST = -51; signal line is +6

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short as Black Monday occurs on Wall Street. Utes failed on Friday so you knew the week would begin soggy. The wheels fell off before munch time when UTIL lost 952. The stock market trap door flew open, and Joe Sixpack was swinging where the little birdies sing meeting his Waterloo, as Stonewall Jackson sings. The United States stock market is down about -9% in a 3-day crash now down more than -20% from the record highs. It was an ugly tape today.

The bears are cruising with the algo number 57 points below the signal line. The bulls have to push utilities and copper higher and hope for positive news to stabilize markets. UTIL 952 will halt the selling. UTIL begins tomorrow at 935.

The Fed is going to hike rates on Wednesday and 50 bips was expected now many call for 75 bips. The wealthy elite class raped the stock market, and America, for all its worth from March 2009 (when QE 1 started) to present, courtesy of the Fed's doves that will receive their future quid pro quo from the investment banks, and are taking the easy money off the table. It is the corrupt crony capitalism system.

6/19/22; 7:00 PM EST =
6/16/22; 9:00 AM EST =
6/13/22; 10:48 AM EST = -51; signal line is +6
6/13/22; 9:36 AM EST = -35; signal line is +9
6/12/22; 7:00 PM EST = -19; signal line is +10
6/10/22; 10:00 AM EST = -19; signal line is +12
6/10/22; 8:36 AM EST = -19; signal line is +13
6/10/22; 7:11 AM EST = -5; signal line is +13
6/10/22; 6:37 AM EST = -19; signal line is +13
6/9/22; 2:41 PM EST = -5; signal line is +13; go short 4078; (Benchmark SPX for 2022 = -14.4%)(Keybot algo this trade = -0.6%; Keybot algo for 2022 = +9.5%)(Actual results this trade = -0.5%; Actual results for 2022 = +8.0%)

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips short yesterday afternoon at SPX 4078. The robot did not bite on the short side out of the gate due to the gap-down move. Typically, stocks will recover under that scenario but the weakness in copper creates a pall over the market and in the afternoon the wheels fell off.

The chips started to rally early and then performed a faceplant guaranteeing stock weakness. The quant is most fixated on volatility right now. Also, copper and utilities.

As volatility goes, so goes the stock market inversely. The bull/bear line in the sand is VIX 26.59. Yesterday's stock market selling is no biggie but if the VIX pops above 26.59, the stock market will quickly deteriorate. The VIX ran up into the 26.40's a couple hours ago and is now trading at 26.34 (bullish) about 4-1/2 hours before the opening bell in the States. The selloff will not have any downside oomph if the VIX remains below 26.59.

Bulls need higher copper to steady the market ship. Bulls need CPER above 26.77 (now at 26.39). This equates to the bulls needing a +1.4% pop in the red metal futures. Copper futures are down -0.3% right now so the bulls need a +1.7% gain in copper today to create stock market happiness.

The quant is tracking utilities again which have been ignored for several weeks; an interesting development. The utes tell you if a fun stock market crash will occur, or not. UTIL collapses to 986. The bull/bear line in the sand is at 938 so the bulls are likely safe today. All Hades will break loose if UTIL loses 938. But this is not the key element in play. For all of next week, UTIL 988.47 is the bull/bear line in the sand. UTIL at 986 is a failure that will create stock market weakness but it does not count until Monday morning. Watch UTIL 988 like a hawk today because the bulls need to push utilities back above before the closing bell. If UTIL ends the week below 988, that will create stock market weakness come Monday morning.

The analysis is more intense, however. UTIL 951 is also coming into play which is the trap-door for the US stock market. If UTIL finishes today above 988.47, the bulls remain in the game and have a good chance of rallying stocks next week into the Wednesday FOMC decision. If UTIL remains below 988.47 at the end of today, that is a bad omen for next week and will create downside in stocks. If UTIL 951 fails, it is light's out. The SPX would be expected to lose between 20 and 40 points within an hour or two after the trap-door fails and serious stock market carnage would follow. The US markets would assume a crash profile if UTIL 951 fails. So there is lots of fun ahead. Keybot sees 1's and 0's so it will be interesting to see how it navigates through the minefield.

On the last trade, that ran for a week, the quant program and actual trading each lose a half percent. For the year thus far, the benchmark S&P 500 is down -14%. The Keybot the Quant algorithm program is up +10% and the actual trading generated by the robot is up +8%. After 5 months of 2022, Keybot is outperforming the SPX by +22%. Keybot exits SPY and enters SH remaining in the 1x non-leveraged ETF's because the market price action is erratic and unstable prone to whipsaws. Speaking of which, do not be surprised if Keybot whipsaws back to the long side but it likely needs stronger copper and chips.

Watch VIX 26.59 today since it tells you everything you need to know about US stock market direction. If VIX remains below, watch copper and the chips to see if they are rallying which would be positive for the bull case.

If VIX pops above 26.59, stocks are in major trouble. If UTIL closes below 988.47 today, it is a bad omen for next week. Conversely, a rally in utes today and UTIL moving above 988.47 sets up positivity for early next week.

6/12/22; 7:00 PM EST =
6/10/22; 10:00 AM EST =
6/9/22; 2:41 PM EST = -5; signal line is +13; go short 4078; (Benchmark SPX for 2022 = -14.4%)(Keybot algo this trade = -0.6%; Keybot algo for 2022 = +9.5%)(Actual results this trade = -0.5%; Actual results for 2022 = +8.0%)
6/9/22; 9:36 AM EST = -5; signal line is +13 but algorithm remains long
6/8/22; 10:16 AM EST = +11; signal line is +13 but algorithm remains long
6/8/22; 10:00 AM EST = +27; signal line is +13
6/8/22; 9:36 AM EST = -5; signal line is +12 but algorithm remains long
6/7/22; 3:12 PM EST = +27; signal line is +13
6/7/22; 2:49 PM EST = +11; signal line is +13 but algorithm remains long
6/7/22; 2:15 PM EST = +27; signal line is +13
6/7/22; 12:10 PM EST = +11; signal line is +13 but algorithm remains long
6/7/22; 9:36 AM EST = -5; signal line is +12 but algorithm remains long
6/6/22; 2:21 PM EST = +11; signal line is +12 but algorithm remains long
6/6/22; 2:01 PM EST = +27; signal line is +11
6/6/22; 12:08 PM EST = +11; signal line is +10
6/6/22; 10:38 AM EST = +27; signal line is +10
6/6/22; 10:23 AM EST = +43; signal line is +9
6/6/22; 9:36 AM EST = +27; signal line is +7
6/5/22; 7:00 PM EST = +11; signal line is +6
6/3/22; 1:23 PM EST = +11; signal line is +5
6/3/22; 1:07 PM EST = +27; signal line is +4
6/3/22; 10:34 AM EST = +11; signal line is +3
6/3/22; 9:00 AM EST = +27; signal line is +2
6/2/22; 10:53 AM EST = +27; signal line is +0
6/2/22; 10:25 AM EST = +11; signal line is -1
6/2/22; 10:17 AM EST = +27; signal line is -2; go long 4102; (Benchmark SPX for 2022 = -13.9%)(Keybot algo this trade = +0.0%; Keybot algo for 2022 = +10.1%)(Actual results this trade = +0.1%; Actual results for 2022 = +8.5%)

STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant remains long in the choppy erratic markets. Tomorrow is decision time with the algo number 2 points below the signal line wanting the quant to flip short. The internal parameters will not yet latch 100% to allow the move. It can be like herding kittens. There is likely some drama on tap for tomorrow as markets decide to bounce, or die. The imminent turn to the downside is in play.

The quant is champing at the bit to go short and if the SPX slips below 4107 trending lower, Keybot the Quant will likely flip short. The SPX will begin the Thursday session at 4116 so bears need at least -9 points in the S&P futures overnight.

Bears need weaker copper and/or higher volatility which will guarantee weaker stocks going forward. Copper is sitting smack-dab on top of its bull/bear line in the sand so it will provide a heads-up overnight. As copper goes, so goes the US stock market on Thursday. The bulls must keep CPER above 26.82 (now at 26.83) to maintain hopes for the relief rally to continue. There will likely be Hell to pay if copper trades negative.

Bulls need higher chips and banks. Bulls need SOX above 3075 (now at 3019) and XLF above 35.40 (now at 34.62). These goals may take a little time but the bulls do not have time. Bulls need to come to the opening bell loaded for bear pushing semiconductors and banks strongly higher out of the gate if they want to extend the rally. Check these sectors trading in the pre-market.

Boiling it down to something simple, stock market direction is currently a game of copper versus chips. Bears need lower copper, any negativity will create bear action and likely flip Keybot the Quant short, while bulls need to keep copper green and push chips higher as fast as possible.

Watching copper and chips is more important than watching the SPX since these 2 parameters are going to tell the S&P 500 what to do tomorrow.

6/12/22; 7:00 PM EST =
6/10/22; 10:00 AM EST =
6/8/22; 10:16 AM EST = +11; signal line is +13 but algorithm remains long
6/8/22; 10:00 AM EST = +27; signal line is +13
6/8/22; 9:36 AM EST = -5; signal line is +12 but algorithm remains long
6/7/22; 3:12 PM EST = +27; signal line is +13
6/7/22; 2:49 PM EST = +11; signal line is +13 but algorithm remains long
6/7/22; 2:15 PM EST = +27; signal line is +13
6/7/22; 12:10 PM EST = +11; signal line is +13 but algorithm remains long
6/7/22; 9:36 AM EST = -5; signal line is +12 but algorithm remains long
6/6/22; 2:21 PM EST = +11; signal line is +12 but algorithm remains long
6/6/22; 2:01 PM EST = +27; signal line is +11
6/6/22; 12:08 PM EST = +11; signal line is +10
6/6/22; 10:38 AM EST = +27; signal line is +10
6/6/22; 10:23 AM EST = +43; signal line is +9
6/6/22; 9:36 AM EST = +27; signal line is +7
6/5/22; 7:00 PM EST = +11; signal line is +6
6/3/22; 1:23 PM EST = +11; signal line is +5

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long after the jobs circus Friday. Every day is a different sideshow. Despite the drop in stocks, volatility did not budge. VIX remains low in the bull camp. Ditto copper that remains elevated and bullish.

The bears grab the chips low-hanging fruit smacking the SOX around with a baseball bat creating the stock market negativity.

The algo number is only 6 points above the signal line so the stock market is a coin-flip. Chips, volatility and copper dictate stock market direction currently. Everything else is noise. Banks remain important as well.

Bears need CPER below 26.78 and/or VIX above 26.73. Either parameter will do. Both will create a serious drop in stock prices. Copper futures trade overnight into Monday morning and the VIX will be online at 3 AM EST Monday. Copper futures need to drop about -1% to create market mayhem so watch that overnight Sunday. If copper is down more than -1%, the stock market is in trouble. If copper is weak but not down -1%, that is not a big deal. If copper is positive, that tells you the US stock market is likely going to rally on Monday.

Bears also need higher volatility to prove that they have downside gusto. The VIX has to move 2 big handles to 26.73 to prove that the wheels are falling off the stock market (typically no biggie for volatility that can print crazy big point moves).

If either CPER or VIX turn bearish, consider the imminent turn to the downside in play, and if the SPX is down 10 or more points and trending lower, Keybot the Quant will likely flip short.

Bulls need to keep copper and volatility in the bull camp while pulling the semiconductors higher. Bulls need SOX above 3082 to start a strong upside rally in the stock market.

Bulls need SOX 3082 while bears need either CPER 26.78 or VIX 26.73. One of these 3 will flinch and tell you where the stock market is going. If status quo remains, stocks will bump along sideways until one of them steps up to the plate to reveal their intentions. Keybot prints one prescheduled number next week on Friday.

6/12/22; 7:00 PM EST =
6/10/22; 10:00 AM EST =
6/5/22; 7:00 PM EST =
6/3/22; 1:23 PM EST = +11; signal line is +5
6/3/22; 1:07 PM EST = +27; signal line is +4
6/3/22; 10:34 AM EST = +11; signal line is +3
6/3/22; 9:00 AM EST = +27; signal line is +2
6/2/22; 10:53 AM EST = +27; signal line is +0

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long but there is a story to be told. Craziness. The stock market has been psycho this week up, down, and all around. The quant flips short on hump day then whipsaws back to the long side this morning. It is wild action. If you ignored the last 2 days you would not notice that anything happened. Copper exploded higher which maintains buoyancy in stocks.

Semiconductors, volatility and banks are what matters as previous posts highlight. Copper matters but it has rocket launched higher and should remain in the bull camp for a little while.

Chips and volatility are creating bull fuel while the banks remain in the bear camp. The thrust higher today in stocks is initiated by the chips. Volatility drops and is comfortably below the bull/bear line in the sand at VIX 26.80 creating upside strength in the stock market.

Thus, the battle is chips versus banks. Bears need SOX below 3083 (now at 3137 running higher creating upside joy for stocks). Bulls need XLF above 35.55 (now at 35.22 in the bear camp) to seal the deal for an upside orgy party in the stock market. One of these two will flinch and it will tell you the stock market direction forward.

For the trade from last Friday to Tuesday, the quant program and actual trading each lost about -1%. Keybot the Quant exited SSO and entered SDS remaining in the 2x ETF's.

That trade lasted all of one day from Wednesday to today. The algo program and the actual trading are flat on this trade. For the year thus far, the benchmark S&P 500 is down -14% while the Keybot the Quant program is up +10% and the actual trading generated by the quant is up +9% (outperforming the benchmark by +23%). Keybot exits SDS and enters SPY the 1x ETF since the quant considers the last trade a technical whipsaw. Markets are too erratic so the robot drops down into the single less risky ETF's for the next 30 days.

Watch SOX 3083 and XLF 35.55. One of them will win and one will lose and the path forward will be written. There are always Winners and Losers in the Big City.

6/5/22; 7:00 PM EST =
6/3/22; 9:00 AM EST =
6/2/22; 10:53 AM EST = +27; signal line is +0
6/2/22; 10:25 AM EST = +11; signal line is -1
6/2/22; 10:17 AM EST = +27; signal line is -2; go long 4102; (Benchmark SPX for 2022 = -13.9%)(Keybot algo this trade = +0.0%; Keybot algo for 2022 = +10.1%)(Actual results this trade = +0.1%; Actual results for 2022 = +8.5%)
6/2/22; 9:37 AM EST = +11; signal line is -4 but algorithm remains short
6/1/22; 1:38 PM EST = -5; signal line is -5 but algorithm remains short
6/1/22; 11:24 AM EST = -19; signal line is -5
6/1/22; 10:46 AM EST = -5; signal line is -5 but algorithm remains short
6/1/22; 10:39 AM EST = -19; signal line is -6; go short 4103; (Benchmark SPX for 2022 = -13.9%)(Keybot algo this trade = -0.6%; Keybot algo for 2022 = +10.1%)(Actual results this trade = -1.2%; Actual results for 2022 = +8.4%)
6/1/22; 10:22 AM EST = -5; signal line is -6
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
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%)

Note Added 3:26 PM EST: SOX 3141. XLF 35.29.

Note Added 3:28 PM EST: SOX 3130. XLF 35.22. Craziness.

Note Added 4:22 PM EST: SOX 3158. XLF 35.38. VIX 24.72. The bulls pumped the banks into the closing bell but XLF needs another 17 pennies to prove that the stock market will run far higher. Tomorrow's another day. SOX is a comfortable 75 points above 3083 its bear danger line.