STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the stock market endures more punishment. The beatings will continue until moral improves. UTIL lost the 976 bull/bear line in the sand so stocks remain soggy in the Monday session. S&P futures are up about +50 points as this is typed 1 hour before the US open.

Bulls need either UTIL above 976 and/or VIX below 25.45. Either one will immediately confirm that a bottom is in for stocks and a rally should begin. Both turning bullish would represent a strong recovery rally underway. If stocks rally but the 2 parameters remain bearish, the bulls got nothing and stocks will likely roll over lower again.

On utes, UTIL 888 is another important number for this week but UTIL is at 953 comfortably above the 888 which is a bullish signal. Here is what's interesting. Next week, Keybot the Quant already identifies UTIL 954 as a key bull/bear line in the sand for all of next week (the 888 becomes meaningless). Look how that puppy came straight down to sit at 953-954. It tells you what is occurring. Stocks are likely bottoming this week but the major tell and greenlight for a rally will be if UTIL ends the week above or below 954.

Watch UTIL like a hawk since it will tell you the direction of stocks ahead. A drop in utes below 953 today and deteriorating lower is extremely bad news for the US stock market and indicates that a major crash is likely going to happen at any time forward.

If utes rally today, that is a hopeful sign for bulls that the relief rally is beginning. UTIL above 976 will signal that a bull rally is underway and strengthening.

The bears are in charge but the algo number is only 17 points below the signal line and came within 1 point out of the gate yesterday. This hints that the quant is sniffing out a potential bottom but time will tell since Keybot the Quant only sees 1's and 0's.

Keybot prints a pre-scheduled number this morning and another on Friday morning. EOQ3 is at hand (end of third quarter; July, August, September) and Q4 begins on Saturday.

10/2/22; 7:00 PM EST EOM EOQ3 =
9/30/22; 10:00 AM EST =
9/27/22; 10:00 AM EST =
9/26/22; 9:38 AM EST = -50; signal line is -33
9/26/22; 9:36 AM EST = -34; signal line is -33
9/25/22; 7:00 PM EST = -50; signal line is -32
9/23/22; 3:49 PM EST = -50; signal line is -32
9/23/22; 11:37 AM EST = -66; signal line is -31
9/23/22; 11:22 AM EST = -50; signal line is -30
9/23/22; 10:47 AM EST = -66; signal line is -29
9/23/22; 9:37 AM EST = -50; signal line is -27
9/20/22; 9:00 AM EST = -34; signal line is -26

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the stock market is hammered. Most every sector is down creating negativity. Markets sink after the Federal Reserve rate decision this afternoon.

It is perhaps the time of destiny. Utilities are holding up through the mayhem. However, if UTIL loses the 977-980 level, the United States stock market will crash. UTL begins tomorrow at 995.

Bulls must stop the utes from falling further at all costs and at the same time rally anything they can to establish a base and stop the downward swoon.

A relief rally is overdue and will likely begin any day. If UTIL 977-980 fails, it is all ovah.

9/25/22; 7:00 PM EST =
9/20/22; 9:00 AM EST = -34; signal line is -26
9/19/22; 9:36 AM EST = -34; signal line is -26
9/18/22; 7:00 PM EST = -50; signal line is -25

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short with the algo number 25 points below the signal line. Utilities remain an important influencer on stock market direction. UTIL 980.42 is the key bull/bear line in the sand for this week. UTIL begins at 1012 so this creates a bullish lift to stocks. Tell that to the S&P futures tanking -40 points after President Biden says the US will join the fight supporting Taiwan if China invades. 

Thus, that 25 point difference and favorability for bears will likely be decreased substantively since UTIL should remain above 980. If UTIL deteriorates and loses the 974-980 level, it is likely that the US stock market will crash. Bulls must keep UTIL above 980 all this week.

The other 3 parameters the quant is tracking right now are banks, volatility and copper. All 3 are in the bear camp creating  market negativity. If utes turn bullish at the opening bell, which is likely, and any one of these 3 parameters turn bullish, Keybot the Quant will champing at the bit to flip long. Bulls need XLF above 33.70, VIX below 25.29 and/or CPER above 21.78.

Copper futures need to rally about +2.2% to create stock market positivity and futures are trading down -1% currently so now the red metal needs +3.2% to help the bulls. VIX is trading at 27.79 right now popping this morning after the Biden comments 2-1/2 sticks from the bull/bear line in the sand. GS, BAC and XLF are all trading down in the pre-market so the bulls are not going to get help from the banks either, at least at the open. The Whitehouse will likely provide clarity on the Taiwan comments today further impacting stocks.

Keybot prints a pre-scheduled number on Tuesday morning. The Federal Reserve rate decision is Wednesday afternoon. The beat goes on.

9/25/22; 7:00 PM EST =
9/20/22; 9:00 AM EST =
9/18/22; 7:00 PM EST = -50; signal line is -25
9/16/22; 10:00 AM EST = -50; signal line is -25
9/15/22; 2:54 PM EST = -50; signal line is -24

STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short. The bears are winning the day creating global fear that a serious recession or worse is on the come. If you were watching utilities, as you should have been, UTIL fell through 1020.31 ushering in the afternoon stock market carnage yesterday.

Utes recovered briefly which sent stocks higher, but then rolled over with UTIL finishing at 1016. Bulls need UTIL back above 1020 pronto or the stock market selling pain will continue.

Banks and vol are also in play. Bulls need XLF above 33.75 (now at 33.36) to stop the selling. Bulls need VIX below 25.29 (now trading at 27.28 in real-time) to stop the blood-bath. The bears are cruising with the algo number 26 points below the signal line.

UTIL above 1020 will likely signal that the selling is over and bulls will reexert themselves.

If UTIL loses 1000, there will be big trouble. If UTIL loses 974, the US stock market will go into a crash profile.

Anyone long the market needs either UTIL 1020, XLF 33.75 or VIX 25.29 to breathe a sigh of relief. If the 3 remain in the bear camp, the stock market selling will continue unabated setting up a potential UTIL 974 tragedy. It's fun.

Utilities, banks and volatility are all that matter right now. Keybot prints a pre-scheduled number shortly after the regular session opens.

9/18/22; 7:00 PM EST =
9/16/22; 10:00 AM EST =
9/15/22; 2:54 PM EST = -50; signal line is -24
9/15/22; 2:37 PM EST = -34; signal line is -23
9/15/22; 2:07 PM EST = -50; signal line is -23
9/13/22; 1:49 PM EST = -34; signal line is -22

STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flips to the bear side at 11 AM EST today at SPX 3987. The move comes out of left field as the bulls were sitting on easy street. The inflation data is hotter than expected so panic sets in that the Fed will have to raise rates faster and higher. Volatility was first to flip creating weakness. The banks and retail stocks are what flushed the whole shooting match to Hell. It was a major bed-sh*tting.

The stock market remains a choppy coin-flip with the quant wanting to flip back to the long side in the afternoon but when that failed (the bulls pushed the VIX down to 25.25 as the robot called out ahead of time but the VIX bounced leading into the final 2 hours of market carnage) it was all over but the crying.

One key sector continues helping the bulls; utilities. There are a lot of moving parts right now but to pull out a few parameters, watch UTIL 1020.31, XLF 33.76 and VIX 25.28.

Bears need UTIL below 1020.31. If this occurs, there will be more stock market carnage and a blood-bath on Wall Street without end.

Bulls need XLF above 33.76 and/or VIX below 25.28 to stop the selling and at least stabilize stocks sideways. Both parameters turning bullish will create a big reversal rally to the upside.

Caution is warranted since markets remain unstable and erratic and the algo number is only 12 points below the signal line.

On the last trade, that ran for not even a week, the quant program gains about +1% and the actual trading gains +2%. For the year thus far, finishing up with Q3 in a couple weeks, the benchmark S&P 500 is down -16%. The Keybot the Quant program is up +18% and the actual trading generated by the quant is up +21% so far in 2022. Keybot exits SSO and enters SDS remaining in the 2x leveraged ETF's.

9/18/22; 7:00 PM EST =
9/16/22; 10:00 AM EST =
9/13/22; 1:49 PM EST = -34; signal line is -22
9/13/22; 1:33 PM EST = -20; signal line is -22 but algorithm remains short
9/13/22; 10:56 AM EST = -34; signal line is -21; go short 3987; (Benchmark SPX for 2022 = -16.3%)(Keybot algo this trade = +1.1%; Keybot algo for 2022 = +18.1%)(Actual results this trade = +2.0%; Actual results for 2022 = +21.2%)
9/13/22; 10:39 AM EST = -18; signal line is -22
9/13/22; 10:04 AM EST = -2; signal line is -22
9/11/22; 7:00 PM EST = +12; signal line is -21
9/8/22; 10:21 AM EST = +12; signal line is -21
9/7/22; 12:32 PM EST = -4; signal line is -22
9/7/22; 12:24 PM EST = -20; signal line is -22
9/7/22; 11:25 AM EST = -4; signal line is -21; go long 3944; (Benchmark SPX for 2022 = -17.3%)(Keybot algo this trade = +3.0%; Keybot algo for 2022 = +17.0%)(Actual results this trade = +6.1%; Actual results for 2022 = +19.2%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long. The bulls are cruising with  the algo number 33 points above the signal line. Short covering creates spurts higher in stocks as bears capitulate exiting short positions. Bulls need higher chips, copper and commodities to keep the party going and copper is already cooperating this morning creating buoyancy in US stock futures.

Bulls need SOX above 2800. SMH and XSD are not trading as yet but both INTC and AMD are a hair higher. Bulls need CPER above 21.85. Price begins the day only a dime below. Copper futures are up +0.7% this morning so CPER should pop to 21.90 leaping into the bull camp. Stronger copper is the main driver of the higher futures currently. Stronger commodities will also help bulls that need GTX above 3705.

On the bear side, it is really all about volatility. Bears need higher volatility to stop the stock market rally. Bears need VIX to move higher and pop above 25.25 which would at least stop the rally from proceeding higher.

Bears need VIX above 25.25. Bulls need CPER above 21.85 which will likely happen at the opening bell creating market joy, SOX above 2800 and GTX above 3705. Use these four parameters to forecast stock market direction.

For example, if stocks rally to beat the band but copper, chips and commodities do not achieve any of the bull targets, the rally is phony-baloney and will fade. If stocks go into a big selloff but the VIX does not go above 25.25, the bears got nothing and the selling will stop, reverse, and a rally will begin. Everything is going the bulls way but inflation data is on tap which may change the mood.

9/18/22; 7:00 PM EST =
9/16/22; 10:00 AM EST =
9/11/22; 7:00 PM EST = +12; signal line is -21
9/8/22; 10:21 AM EST = +12; signal line is -21

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains in the bull camp as the banks win the day creating another leg higher in stocks. Utes, retail and volatility remain bullish and the financials join the upside in Party Town. The algo number is 33 points above the signal line building a comfortable lead.

The banks and copper are battling deciding the path forward for the stock market. Bulls will remain happy if XLF stays above 33.68 and will create another upside leg in stocks if copper rallies. Bulls need CPER above 21.88 to unleash big upside ahead. CPER is at 21.33 so that is 55 cents the bulls need which is 2.6%. Look at that. The bulls are pumping copper futures this morning up +2.0%. It looks like the bulls want to maintain happy stocks into the weekend and are trying for a big stock market rally if they can push copper +2.7% higher.

Conversely, the bears want copper to remain weak and the XLF to collapse under 33.68 to prove that the upside rally in stocks is finished.

UTIL is at 1046 and needs to stay above 1020.31 for all of next week to maintain the bull party. Check UTIL at the end of the session. As long as price is above 1020, next week will shape up as positive but if utes collapse today and UTIL ends the week sub 1020, it will be a negative issue for next week. 

9/11/22; 7:00 PM EST =
9/8/22; 10:21 AM EST = +12; signal line is -21
9/7/22; 12:32 PM EST = -4; signal line is -22

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips to the long side at SPX 3944. As explained in the previous post, the utes, retail stocks and volatility told the tale. You could see the robot was moving that way. The algo number is only 18 points above the signal line so the bulls are going to have to prove that they can keep the rally going.

Banks are making a late day run watching it in real-time. Bulls need XLF above 33.64. Price is jumping higher to 33.52, now down. That is only a dime away from creating another up leg for stocks.

The UTIL bull/bear line in the sand for this week is 1035.30 and price is at 1048 creating stock market upside. The RTH bull/bear line in the sand is 168.00 with price leaping towards 171 creating bullishness. The VIX bull/bear line in the sand is 25.84 and price drops to a 24 handle completing the trifecta of bullish joy and upside orgy.

The bulls are driving the market ship again and need XLF 33.64 to prove that they got more upside game. Bears need UTIL below 1035.30, RTH below 168 and/or VIX above 25.84 to stop the rally. Any 1 of the 3 would do. If all three remain bullish, stocks will likely pump higher into the weekend.

As a side note for the more advanced kids, yes, you with the pimples, pay attention. UTIL 1035.30 will be meaningless next week replaced by 1020.31. Thus, watch the utilities especially late Friday afternoon to see where UTIL ends the week. If UTIL ends Friday above 1020.31, that tells you next week is a go for bulls. If UTIL stumbles from here and falls through 1035.30 tomorrow or Friday that is trouble for stocks, and if it ends Friday below 1020.31, that means next week is going to start out ugly.

On the last trade, the algo program gains +3% and the actual trading generated by the quant gains +6%. For the year thus far, the benchmark S&P 500, the SPX, the United States stock market, is down -17%. The Keybot the Quant program is up +17% and the actual trading generated by the quant is up +19% outperforming the benchmark by 36 percentage points (that's a lot). Keybot the Quant exits SDS and enters SSO remaining in the 2x ETF's.

XLF 33.64, UTIL 1035.30 this week and 1020.31 next week, RTH 168 and VIX 25.84 are the current parameters dictating stock market direction. They tell you where the stock market puck is going not where it's been.

As this windbag post is typed, XLF finishes the session at 33.47 so that is 17 pennies in the bear camp creating stock market sogginess.

UTIL ends at 1047, RTH at 171 and VIX down to 24.76 all three creating market joy. One of these 4 parameters will flinch tomorrow and tell you what is going on.

9/11/22; 7:00 PM EST =
9/7/22; 12:32 PM EST = -4; signal line is -22
9/7/22; 12:24 PM EST = -20; signal line is -22
9/7/22; 11:25 AM EST = -4; signal line is -21; go long 3944; (Benchmark SPX for 2022 = -17.3%)(Keybot algo this trade = +3.0%; Keybot algo for 2022 = +17.0%)(Actual results this trade = +6.1%; Actual results for 2022 = +19.2%)
9/7/22; 10:59 AM EST = -20; signal line is -21 but algorithm remains short
9/7/22; 10:36 AM EST = -34; signal line is -20
9/6/22; 9:42 AM EST = -50; signal line is -20
9/6/22; 9:36 AM EST = -36; signal line is -18
9/6/22; 3:06 AM EST = -20; signal line is -16
9/5/22; 11:30 AM EST = -34; signal line is -15
9/5/22; 10:44 AM EST = -20; signal line is -12
9/5/22; 3:06 AM EST = -34; signal line is -10
9/4/22; 7:00 PM EST = -20; signal line is -6
9/2/22; 3:55 PM EST = -20; signal line is -4
9/2/22; 3:40 PM EST = -34; signal line is -3
9/2/22; 9:00 AM EST = -20; signal line is +0
9/1/22; 3:55 PM EST = -20; signal line is +1
9/1/22; 3:21 AM EST = -34; signal line is +2
8/31/22; 7:00 PM EST EOM = -20; signal line is +5
8/31/22; 3:10 PM EST = -20; signal line is +6
8/31/22; 2:38 PM EST = -34; signal line is +8
8/31/22; 2:04 PM EST = -20; signal line is +10
8/31/22; 1:44 PM EST = -34; signal line is +12
8/31/22; 4:11 AM EST = -20; signal line is +14
8/30/22; 11:21 AM EST = -34; signal line is +16
8/30/22; 10:06 AM EST = -20; signal line is +17
8/30/22; 10:00 AM EST = +10; signal line is +19
8/30/22; 3:38 AM EST = +7; signal line is +19
8/29/22; 3:59 PM EST = -7; signal line is +19
8/29/22; 12:48 PM EST = +7; signal line is +20
8/29/22; 12:36 PM EST = -7; signal line is +20
8/29/22; 12:31 PM EST = +7; signal line is +21
8/29/22; 12:05 PM EST = -9; signal line is +21
8/29/22; 9:36 AM EST = -23; signal line is +22
8/28/22; 7:00 PM EST = +7; signal line is +22
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%)

STOCK MARKET BEARISH -- SHORT

Happy Labor Day. Keybot the Quant remains short the US stock market as the news bombs send equities in one violent direction or another. Friday at noon Gazprom announced that the Nord Stream pipeline would not reopen sending the euro into a tailspin, the US dollar higher, and US stocks into the toilet. European stocks are playing catch-up getting flushed today.

The bears are in control of stocks with the algo number 24 points below the signal line. Volatility, utilities and retail stocks are controlling stock market direction currently and their interplay dictates the road ahead.

UTIL is at 1014 ready to start the holiday-shortened trading week tomorrow. The problem for bulls is that UTIL must be above 1035.30 all week long to send the stock market higher. Thus, out of the gate tomorrow morning, utes are going to create stock market weakness. Watch UTIL closely because if it rallies like a banshee and overtakes 1035, the bulls are creating a come-back rally. UTIL below 1035 will create soggy stocks.

The VIX bull/bear line in the sand is 25.98. Despite the big sell-off on Friday, the VIX remained below 25.98 indicating that the selling is not a big deal but the VIX is now back above 25.98 at 26.20 indicating potential challenges ahead. It is only 22 pennies on the bear side (remember, volatility moves inversely to stocks over 90% of the time) so volatility remains a toss-up. Watch the VIX like a hawk in the morning to see where it is at in relation to 25.98.

Retail stocks are also in play. RTH is at 166.79 in the bear camp below the 168 bull/bear line in the sand. If RTH remains below 168, stocks will remain soggy. If RTH moves above 168, stocks are going to rally higher going forward.

Thus, bears need to keep UTIL below 1035, RTH below 168 and VIX above 25.98 and it is smooth sailing for downside stock market carnage ahead.

Bulls need to pull UTIL above 1035, RTH above 168 and VIX below 25.98. You can see that the bears are in the driver's seat but these parameters can change quickly. There is no need to watch the stock market direction; just watch these 3 parameters that will tell you where the stock market is going instead of where it has been.

If any of the 3 parameters turn bullish, consider the caution flag out. If 2 of the 3 turn bullish, consider the imminent turn to the long side to be in play. If all 3 turn bullish, stocks will be running higher in a big rally and Keybot the Quant will likely have already flipped long. Those numbers remain valid for the next couple-three days. 

9/11/22; 7:00 PM EST =
9/5/22; 3:06 AM EST = -34; signal line is -10
9/4/22; 7:00 PM EST = -20; signal line is -6
9/2/22; 3:55 PM EST = -20; signal line is -4
9/2/22; 3:40 PM EST = -34; signal line is -3
9/2/22; 9:00 AM EST = -20; signal line is +0
9/1/22; 3:55 PM EST = -20; signal line is +1
9/1/22; 3:21 AM EST = -34; signal line is +2
8/31/22; 7:00 PM EST EOM = -20; signal line is +5
8/31/22; 3:10 PM EST = -20; signal line is +6
8/31/22; 2:38 PM EST = -34; signal line is +8
8/31/22; 2:04 PM EST = -20; signal line is +10
8/31/22; 1:44 PM EST = -34; signal line is +12
8/31/22; 4:11 AM EST = -20; signal line is +14
8/30/22; 11:21 AM EST = -34; signal line is +16
8/30/22; 10:06 AM EST = -20; signal line is +17
8/30/22; 10:00 AM EST = +10; signal line is +19
8/30/22; 3:38 AM EST = +7; signal line is +19
8/29/22; 3:59 PM EST = -7; signal line is +19
8/29/22; 12:48 PM EST = +7; signal line is +20
8/29/22; 12:36 PM EST = -7; signal line is +20
8/29/22; 12:31 PM EST = +7; signal line is +21
8/29/22; 12:05 PM EST = -9; signal line is +21
8/29/22; 9:36 AM EST = -23; signal line is +22
8/28/22; 7:00 PM EST = +7; signal line is +22
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%)