STOCK MARKET BEARISH -- SHORT -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is short but champing at the bit to go long again. The stock market unpalatable chop suey continues. That's a ten-dollar college word in that sentence. The algo number is 1 point above the signal line since munchtime Friday so the robot wants to flip long but the internal parameters will not yet fully latch to permit the move.

It is all riding on volatility; Uncle Vix. The bull/bear line in the sand that determines the direction of the US stock market ahead is VIX 15.63. Price is at 14.84 creating buoyancy in stocks. Bears need the VIX above 15.63 immediately, otherwise, they got buptkis. Bulls need to keep the VIX below 15.63 to prove that they can stage a relief rally. As volatility goes, so goes the stock market in the opposite direction (SPX and VIX are an inverse correlation over 92% of the time).

If the VIX remains below 15.63, and the SPX rallies on Monday morning above 4476 trending higher, Keybot the Quant will likely flip long, hence the imminent turn notation in the title line.

A gap up open is not good for bulls since it may trigger a timer that delays the flip to the long side for about 90 minutes. Bulls need S&P futures to be positive by only a few points, then after the opening bell, the SPX cash index needs to slowly move higher and then at about 12 points higher, the model may flip long. A strong gap-up open of 12 points or higher will probably trigger the gap-up timer.

The breakdown in semiconductors last week was a big deal but very few people even gave it a passing nod. Analysts assume AI is a new bright horizon and chips will lead. AI, schmy. Copper is also sinking in the ooze as China's economy disappoints. Of course it does. Filthy Dictator Xi is ruling China under a full-blown communist system and Western companies are jumping ship (90 million dirtbags in the CCP, led by Xi, control the 1.4 billion Chinese folks that must do what they are told or face punishment, prison or death; such is communism). Bulls need SOX above 3611 and CPER above 23.70 to prove that stocks can rally again; a tall order for the week ahead.

Bears need VIX above 15.63 pronto as explained above and weaker banks would create the next leg lower for stocks. Bears need XLF below 34.20 for the stock market to fall apart. This also is a tall order.

Watch VIX in the week ahead since it will tell you who is winning. Keybot prints a pre-scheduled number on Wednesday morning which is also when the new moon peaks for the month (darkest time of month so fighting in Ukraine will intensify since night vision equipment rules). Bad Moon Rising?

8/20/23; 7:00 PM EST =
8/16/23; 9:00 AM EST =
8/13/23; 7:00 PM EST = +12; signal line is +11 but algorithm remains short
8/11/23; 12:03 PM EST = +12; signal line is +11 but algorithm remains short
8/11/23; 10:56 AM EST = -2; signal line is +12
8/11/23; 10:26 AM EST = +12; signal line is +13
8/11/23; 10:00 AM EST = -2; signal line is +14