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%)