Keybot the Quant flips back to the short side after yesterday's opening bell at SPX 4152 and it was no big surprise. Do not hold your breath since the choppy whipsaw slop, and Fed decision today, may flip the model long again. The multi-month chop suey shows no sign of abating.
Utilities failed in a big way yesterday and this is a very bad omen for stocks going forward. The bulls have managed in recent weeks to keep saving the day with the utes but their luck may have ran out yesterday. Chips and retail stocks also fail although retail battled back into the bull camp late-day. The RTH ETF is basically a read on Scamazon, Home Despot, Walfart and Costalotco.
The algo number is only 14 points below the signal line so the bears have to prove themselves. The door remains open for the bulls with Pope Powell, donning a pale green robe, waiting in the wings today ready to massage the markets. The caution and imminent turn flags remain in the title line since anything goes this week. The stock market is a coin-flip.
For today, as Powell brings the tablets down from On High to tell traders how to trade, watch UTIL 460.60. Bulls desperately need to recover this level otherwise there will be Hell to pay. Bulls also need SOX above 3027 to save the day.
Bears need RTH below 162.60 which will trigger another leg lower for US stocks. Bears also need NYA below 15160 a critically-important bull/bear line in the sand that, like utes, have not only short-term ramifications but also will create intermediate and longer-term pain for stocks. NYA price is at 15315 within striking distance of the 15160 line in the sand. Bears will throw confetti if this failure occurs while bulls will be crying in their beer watching stocks collapse. Conversely, if NYA price comes down to test 15160 and bounces, the bulls will cheer since that will hint at more days and probably a couple-few more weeks of buoyancy in the stock market.
If bullish, you want higher utes and chips. Either parameter will place Keybot the Quant in a position to go long but the SPX likely needs to rally 40 or 50 points to allow the flip. If bearish, you want weaker retail stocks (AMZN) and NYA index.
On the last trade, that ran for not even one day, only about 6 trading hours, the quant program loses a half-percent and the actual trading loses about a percent. On the year thus far, the benchmark S&P 500 is up +8%, the quant program is flat and the actual trading generated by Keybot the Quant is up +1%. It is a year of choppy slop. Algorithms and quants have difficulty dealing with choppy markets. Some investment houses will pull the plug on their models. Keybot is hanging in there tracking and riding the multi-month bucking bronco which tramples bulls and bears alike. It is impressive to be flat in such a hostile trading environment. Keybot exits SSO and enters SH a 1x ETF. The robot will not employ 2x leveraged ETF's for at least 30 days due to the whipsaw move. The quant senses more wicked chop ahead and drops into the 1x ETF's to automatically reduce risk. The beat goes on.
5/7/23;
7:00 PM EST =
5/5/23;
9:00 AM EST =
5/2/23;
1:02 PM EST = -21; signal line is -7
5/2/23;
10:15 AM EST = -37; signal line is -6
5/2/23;
10:04 AM EST = -21; signal line is -4
5/2/23;
9:50 AM EST = -5; signal line is -3
5/2/23; 9:39 AM EST = -21; signal line is -3; go short 4152;
(Benchmark SPX for 2023 = +8.1%)(Keybot algo this trade = -0.5%; Keybot algo
for 2023 = -0.5%)(Actual results this trade = -0.8%; Actual results for 2023 =
+1.1%)
5/1/23;
3:59 PM EST = -5; signal line is -2 but algorithm remains long
5/1/23;
2:40 PM EST = +11; signal line is -1
5/1/23;
10:14 AM EST = +27; signal line is +0
5/1/23; 10:00 AM EST = +11; signal line is +1; go long 4172;
(Benchmark SPX for 2023 = +8.7%)(Keybot algo this trade = -1.3%; Keybot algo
for 2023 = +0.0%)(Actual results this trade = -2.3%; Actual results for 2023 =
+1.9%)
