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%)