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

Keybot the Quant flips to the long side on Friday afternoon at SPX 3822 during the last one-half hour of trading. Higher utilities and lower volatility pump the stock market higher producing a big reversal off the intraday lows. July begins on a positive note for the bulls.

The algo number is 15 points above the signal line so the flip to the bull camp is not enthusiastic as yet. The caution flag and imminent turn notation is in the title line since anything can happen come Tuesday when US markets reopen after the Independence Day holiday on Monday, 7/4/22.

Utilities, volatility and commodities are controlling US stock market direction currently. UTIL is at 989 above the key 953 level and also crosses above the 983 line in the sand creating stock market joy. It took the whole week to get there but UTIL finally made it overcoming 983. But, next week will be what have you done for me lately? The 983 number is meaningless and replaced with 1016.64 for all of next week (only 4 trading days due to the holiday).

Thus, UTIL must gain 34 big points out of the gate on Tuesday morning. It likely will not happen which sets up bearish negativity to start next week. If UTIL does not attain 1017 as trading begins, watch the SPX because if it is below 3752 trending lower, Keybot the Quant will likely whipsaw back to the short side (hence, the imminent turn notation above). The SPX begins at 3825 so that would be a hefty drop of 73 points that the bears need.

The VIX drops to 26.70, comically called out by happenstance in the last message before it occurred in real-time, creating bull fuel. The big stock market rally into the closing bell was created by the VIX dropping below 27.02 so watch it like a hawk. Bulls rule below 27 but bears rule above 27. Like the utes, if VIX moves above 27 and the SPX drops below 3752, the robot will likely flip short.

If UTIL is unable to achieve 1017 (likely) and VIX moves above 27, the bears may be able to flip the model short if the SPX drops below 3784. So there are lots of moving parts and Tuesday may be a wild day as traders nurse hangovers and upset stomachs from parties, fireworks and deviled eggs left out in the sun a few hours. The stock market is a coin-flip.

Bulls need stronger commodities to keep the upside party going. UTIL will likely not attain 1017 right away on Monday morning, so bulls need something else to keep them going and that is commodities. GTX is at 3824. Bulls will rejoice with stocks rallying if GTX overtakes 3843 heading higher. Out of the gate on Friday morning, GTX came straight up to kiss the bull/bear line in the sand, but collapsed rather than poking up through. It will likely take another run at 3843 on Tuesday morning.

Markets can go either way but UTIL 953 and 1017, VIX 27.02 and GTX 3843 tell you everything you need to know about stock market direction next week. UTIL is above 953 and VIX is below 27.02 creating lift and buoyancy in the stock market but UTIL is below 1017 and GTX under 3843 creating sogginess in stocks. One or several of these parameters may flip sides and that tells you where the stock market is going. Easy-peasy.

On the last trade that ran for 3 weeks, the robot program and actual trading both gain about +6% (the model was short as stocks fell). For the year thus far, with one-half of it in the bag, the benchmark SPX is down -20% continuing to tease that stupid bear market level.

Use the SPX 12-month MA cross and the NYA 40-week MA cross to identify cyclical bull and bear markets not the idiot -20% stuff. Also, use the slope of the 150-day MA for indexes and individual stocks to identify bull and bear markets. If the 150-day MA is sloping down, that ticker is in a bear market, if sloping up, a bull market. The S&P 500, the US stock market, is unequivocally in a cyclical bear market currently despite that -19.8% garbage that says it is not.

The Keybot the Quant algorithm program is up +16% on the year thus far and the actual trading generated by the quant is up +14% so far in 2022. Keybot the Quant's trades are outperforming the benchmark SPX by 34 percentage points; that's bigtime. The whipsaw timer from 6/2/22 has not yet expired so Keybot exits SH and enters DIA remaining in the 1x ETF's.

Happy July 4th to all. The bulls are back in charge; the Boys Are Back in Town as Thin Lizzy would sing. Keep your eyes open for a potential whipsaw on Tuesday but, as explained above, the SPX is going to have to drop from 41 to 73 points so it may be too tall of an order for the bears.

If you want the stock market to drop, you want weaker utilities, weaker commodities and higher volatility. If you want the stock market to rally, you want stronger utes, stronger commodities and lower volatility.

7/3/22; 7:00 PM EST =
7/1/22; 3:33 PM EST = -22; signal line is -37; go long 3822; (Benchmark SPX for 2022 = -19.8%)(Keybot algo this trade = +6.3%; Keybot algo for 2022 = +15.8%)(Actual results this trade = +6.0%; Actual results for 2022 = +14.0%)
7/1/22; 2:20 PM EST = -22; signal line is -37 but algorithm remains short
7/1/22; 1:30 PM EST = -36; signal line is -37 but algorithm remains short
7/1/22; 12:03 PM EST = -52; signal line is -37
7/1/22; 11:06 AM EST = -52; signal line is -36
6/30/22; 7:00 PM EST EOM EOQ2 EOH1 = -52; signal line is -34
6/30/22; 10:18 AM EST = -52; signal line is -33
6/28/22; 11:25 AM EST = -38; signal line is -32
6/28/22; 11:13 AM EST = -24; signal line is -30 but algorithm remains short
6/28/22; 10:36 AM EST = -38; signal line is -29
6/28/22; 10:00 AM EST = -24; signal line is -27 but algorithm remains short
6/28/22; 6:35 AM EST = -21; signal line is -26 but algorithm remains short
6/28/22; 5:41 AM EST = -35; signal line is -24
6/28/22; 4:58 AM EST = -21; signal line is -23 but algorithm remains short
6/28/22; 3:06 AM EST = -35; signal line is -21
6/27/22; 3:59 PM EST = -21; signal line is -19
6/27/22; 10:13 AM EST = -35; signal line is -19
6/27/22; 10:01 AM EST = -51; signal line is -17
6/27/22; 9:47 AM EST = -35; signal line is -14
6/27/22; 9:36 AM EST = -51; signal line is -13
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
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%)