STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the short side in the final few minutes of trading on Friday at SPX 4064. It was a stock market blood bath with the Dow down ovr a 1,000 points and the SPX off 3.7%. Bloody carnage occurs after Powell stands before the Jackson Hole consortium, like Julius Caesar standing before the coliseum, extending his right arm, and giving the market the thumbs down.

Chips and copper created the solid weakness and then banks fell apart into the closing bell. Thus, stick  with the girls that are dancing; XLF, CPER and SOX that are the banks, copper and semiconductors, respectively.

The algo number is only 16 points below the signal line which is not much so the bears are flexing their muscles but no one is impressed as yet. Bears need weaker utes, retail stocks and commodities and higher volatility while bulls need stronger banks, copper and chips. That is a lot of moving parts. Typically only 1 or 2, maybe 3, parameters at most will impact US stock market direction at any given time.

For you that follow the exact numbers so you have a heads-up on what the market may do, the bears need UTIL below 991, RTH below 168.18, GTX below 3743 and VIX above 25.83. Any one of these will create more weakness in the stock market. Two turning bearish is worse and so on so you can gauge the downside strength with these 4 parameters. If the stock market sells off on Monday morning but none of these 4 parameters flip into the bear camp, the bears got butpkis and the stock market will turn around and begin rallying. If stocks are weak, and at least one of the parameters turn bearish, stocks will remain soggy.

The bulls need XLF above 33.83, CPER above 22.31 and SOX above 2904 to right the US stock market ship. Any one of the 3 turning bullish will immediately stop the stock market selling. Two will create strong upside and if all 3 turn bullish stocks will stage a reversal move higher that is equal to Friday's mini-crash move lower.

But, as mentioned above, dance with the girls that got you here. Focus on XLF 33.83, CPER 22.31 and SOX 2904 out of the gate on Monday. They will tell a lot if they remain bearish or if any of the 3 flip bullish. If the market starts to crack open like an egg with stocks falling in earnest, watch the 4 parameters described above to gauge how much more downside is ahead.

On the last trade that ran for a month, the Keybot the Quant algorithm and the actual trading each gain +3%. That was quite a rally over the last month. On the year thus far, the benchmark S&P 500, the United States stock market, is down -15%. The Keybot the Quant program is up +14% and the actual trading generated by the quant is up +13%. The actual trading is outperforming the benchmark SPX by 28 percentage points. The whipsaw timer expires so the quant is back into the 2x leveraged ETF's exiting the 1x SPY long ETF and entering the 2x SDS ultra short ETF.

There are a lot of moving parts in the unstable erratic markets right now. The parameters above will tell you what is going on as the week proceeds.

9/4/22; 7:00 PM EST =
9/2/22; 9:00 AM EST =
8/31/22; 7:00 PM EST EOM =
8/30/22; 10:00 AM EST =
8/28/22; 7:00 PM EST =
8/26/22; 3:56 PM EST = +7; signal line is +23; go short 4064; (Benchmark SPX for 2022 = -14.7%)(Keybot algo this trade = +2.7%; Keybot algo for 2022 = +14.0%)(Actual results this trade = +3.4%; Actual results for 2022 = +13.1%)
8/26/22; 11:25 AM EST = +23; signal line is +22
8/26/22; 10:30 AM EST = +39; signal line is +20
8/26/22; 10:00 AM EST = +55; signal line is +18
8/26/22; 9:36 AM EST = +55; signal line is +14
8/25/22; 9:36 AM EST = +39; signal line is +11
8/23/22; 10:47 AM EST = +23; signal line is +9
8/23/22; 10:03 AM EST = +39; signal line is +8
8/23/22; 9:36 AM EST = +23; signal line is +6
8/22/22; 9:36 AM EST = +9; signal line is +5
8/21/22; 7:00 PM EST = +25; signal line is +5
8/16/22; 9:00 AM EST = +25; signal line is +4
8/14/22; 7:00 PM EST = +25; signal line is +3
8/12/22; 10:00 AM EST = +25; signal line is +2
8/11/22; 1:35 PM EST = +25; signal line is +1
8/11/22; 12:38 PM EST = +41; signal line is 0
8/10/22; 9:36 AM EST = +25; signal line is -1
8/9/22; 11:06 AM EST = +9; signal line is -2
8/8/22; 9:36 AM EST = +25; signal line is -4
8/7/22; 7:00 PM EST = +9; signal line is -5
8/5/22; 9:00 AM EST = +9; signal line is -5
7/31/22; 7:00 PM EST EOM = +9; signal line is -5
7/29/22; 1:10 PM EST = +9; signal line is -6
7/29/22; 10:00 AM EST = +23; signal line is -7
7/29/22; 9:36 AM EST = +23; signal line is -8
7/28/22; 11:34 AM EST = +9; signal line is -9
7/28/22; 9:57 AM EST = -7; signal line is -11
7/27/22; 3:09 PM EST = +9; signal line is -10
7/27/22; 9:36 AM EST = -7; signal line is -12; go long 3959; (Benchmark SPX for 2022 = -16.9%)(Keybot algo this trade = -0.8%; Keybot algo for 2022 = +11.3%)(Actual results this trade = -0.7%; Actual results for 2022 = +9.7%)

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

Keybot the Quant remains long. The robot was quiet last week only printing a pre-scheduled number on 8/16/22.  Yesterday, stocks were soggy but could not gain downside traction because copper and commodities were buoyant due to the dip in the US dollar.

The algo number is only 14 points above the signal line and is nothing that the bulls can hang their hats on. Stocks are getting dicey into Fed Chairman Powell's Jackson Holle remarks on Friday morning.

The quant is focused on 5 parameters; copper, commodities, banks, chips and volatility. These are the drivers of the US stock market direction currently. Copper futures are down -0.8% this hump day morning so that is a win in the bear column.

Bears need GTX below 3739 (now at 3768). If the commodities weaken, and the SPX drops below 4124 trending lower, Keybot the Quant will likely flip short. Stocks will also deteriorate if XLF loses 33.83 or if VIX pops above 25.77.

Bulls need CPER above 22.31 and SOX above 2904 to prove they can take stocks higher.

The 5 parameters above tell you the direction of the stock market going forward. Focus on copper, commodities and chips.

8/28/22; 7:00 PM EST =
8/26/22; 10:00 AM EST =
8/23/22; 10:47 AM EST = +23; signal line is +9
8/23/22; 10:03 AM EST = +39; signal line is +8
8/23/22; 9:36 AM EST = +23; signal line is +6
8/22/22; 9:36 AM EST = +9; signal line is +5
8/21/22; 7:00 PM EST = +25; signal line is +5
8/16/22; 9:00 AM EST = +25; signal line is +4
8/14/22; 7:00 PM EST = +25; signal line is +3
8/12/22; 10:00 AM EST = +25; signal line is +2
8/11/22; 1:35 PM EST = +25; signal line is +1
8/11/22; 12:38 PM EST = +41; signal line is 0
8/10/22; 9:36 AM EST = +25; signal line is -1
8/9/22; 11:06 AM EST = +9; signal line is -2
8/8/22; 9:36 AM EST = +25; signal line is -4
8/7/22; 7:00 PM EST = +9; signal line is -5

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains bullish and idles along last week without printing any numbers except for the pre-scheduled Friday number. The algo number is only 14 points above the signal line so the bulls need more juice to take stocks higher and it comes in the form of utilities.

UTIL 999.90 is the bull/bear line in the sand this week and price starts at 1014 providing further buoyancy in stock prices for bulls. Watch it closely because if UTIL 999.90 fails, the stock market will be soggy and not making further upside progress.

Stronger copper and commodities will help bulls. Weaker utilities and banks, and higher volatility, will help the bears. Monday will likely be status quo for markets moving sideways without conviction either way but if UTIL remains above 1K, the US stock market will catch a bid higher.

8/14/22; 7:00 PM EST =
8/12/22; 10:00 AM EST =
8/7/22; 7:00 PM EST = +9; signal line is -5
8/5/22; 9:00 AM EST = +9; signal line is -5
7/31/22; 7:00 PM EST EOM = +9; signal line is -5

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the bulls and bears fight over the banks. The bull/bear line in the sand is XLF 33.02 (remember, these numbers are changing every second) with price at 33.06. The stock market story will be told when stocks open for trading. As the banks go, so so goes the market.

Bulls need XLF to remain above 33.02 and start moving a lot higher to save the day and keep the rally going. The corrupt Wall Street gang stick-saved the banks in the final minutes of trading yesterday preventing the failure. In the zeal to prevent the collapse, a flash spike occurs in XLF at 3:57 PM EST from 33.06 to 33.25 in seconds, then back down. Sweep that under the exchange's rug. The crony capitalists did not want banks to fail yesterday. They needed to buy time to figure things out overnight.

Bulls will also be helped by higher commodities, copper and utilities. GTX is stalled and could not help the bulls in the commodity sector yesterday.

UTIL is key at 1014 because, for all of next week, UTIL 999.90 is a bull/bear line in the sand. Thus, if UTIL finishes the week, at 4:00 PM EST Friday, above 999.90, the US stock market will rally to begin next week. If UTIL drops below 999.90 this week and finishes that way, the US stock market is going to be soggy next week. Of course, XLF is the rudder steering the US stock market ship right now.

Bears simply need to push XLF under 33.02 and they will win going forward. It is on a silver platter. If XLF fails consider the imminent turn to be in play and if the SPX trades below 4080 trending lower (starting at 4091), Keybot the Quant will likely flip short.

About 2 hours before US trading begins for the regular session for hump day, XLF is up +0.5% to 33.24. Bulls win. Corrupt humans. It makes you laugh. They figured it out overnight. S&P futures +20. VIX 23.42.

8/7/22; 7:00 PM EST =
8/5/22; 9:00 AM EST =
7/31/22; 7:00 PM EST EOM = +9; signal line is -5

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long. The algo number is only 14 points above the signal line so the stock market remains a coin-flip. Banks, volatility and commodities are running the show.

Bulls need GTX above 3776 to create another leg higher in the stock market.

Bears need XLF below 33.20 and/or VIX above 25.73 to stop the rally dead in its tracks. Bulls are fine if these 2 parameters remain bullish. If one of the 2 parameters turn bearish, either one would do, consider the imminent turn to the downside to be in play, and if the SPX is below 4096 heading lower, Keybot the Quant will likely flip short.

The banks matter. Focus on the XLF 33.20 bull/bear line in the sand.  Bears need weaker banks and higher volatility. Bulls need stronger commodities and copper.

8/7/22; 7:00 PM EST =
8/5/22; 9:00 AM EST =
7/31/22; 7:00 PM EST EOM = +9; signal line is -5
7/29/22; 1:10 PM EST = +9; signal line is -6
7/29/22; 10:00 AM EST = +23; signal line is -7
7/29/22; 9:36 AM EST = +23; signal line is -8
7/28/22; 11:34 AM EST = +9; signal line is -9