STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant flips back to the long side on Friday at SPX 4524; the multi-month choppy slop continues. Comically, the robot already wants to flip back to the short side with the algo number 10 points below the signal line so the imminent turn notation is in the title line.

If the SPX moves lower in an orderly fashion on Monday morning and drops and trends below 4475, Keybot the Quant will likely flip back to the short side. This represents only a 3 point drop in S&P futures overnight Sunday into Monday for the bears to growl again.

Volatility dictated the price action on Friday. The VIX is the only thing that mattered to the stock market. The VIX bull/bear line in the sand is 15.91 with price at 17.10 creating market negativity. Early Friday, after the jobs report, volatility dropped like a rock sending stocks higher but as the day played out, volatility increased sinking stocks. Bulls must push VIX below 15.91, otherwise, they have no hope going forward.

The bears need weaker copper, banks and chips so you can watch these sectors before the opening bell to gauge the strength, or lack thereof, of the market.  Bears need CPER below 23.73, XLF below 34.08 and/or SOX below 3612. Any one of these three turning bearish will create another leg down with the broad stock market. Two turning bearish will create substantive downside in stocks. If all 3 turn bearish in the days ahead, stocks will be collapsing. The utilities remain in failure mode predicting serious doom and gloom for the US stock market for the weeks ahead.

Bears can flip the model back to the short side if SPX drops below 4475. The downside and collapse in stocks will be accelerated if copper, banks or semi's fail as explained above.

Bulls need to keep copper, banks and semiconductors in their camp while at the same time pushing VIX below 15.91 to maintain control of the stock market direction.

On the last trade that ran for a couple days, the algo program and actual trading were dead flat. For the year, the benchmark SPX is up almost +18%, the quant program is up about a percent and the actual trading generated by the quant is up about +3% so far in 2023. The year of chop suey continues.

Monday's opening bell will be interesting and the story will be told by either SPX 4475 (bearish) or VIX 15.91 (bullish). The VIX trades overnight so you can get a heads-up on what will happen in the US markets if you monitor the VIX between 3 AM EST and 9 AM EST Monday. Also, watch copper futures and check tickers such as XLF, XSD, SMH and NVDA in the pre-market to forecast the path ahead for Monday.

8/6/23; 7:00 PM EST =
8/4/23; 2:27 PM EST = +30; signal line is +40 but algorithm remains long
8/4/23; 9:33 AM EST = +44; signal line is +40; go long 4524; (Benchmark SPX for 2023 = +17.8%)(Keybot algo this trade = -0.1%; Keybot algo for 2023 = +1.3%)(Actual results this trade = +0.0%; Actual results for 2023 = +2.9%)
8/4/23; 9:00 AM EST = +44; signal line is +40 but algorithm remains short
8/4/23; 8:36 AM EST = +44; signal line is +40 but algorithm remains short
8/4/23; 7:11 AM EST = +30; signal line is +40
8/4/23; 3:12 AM EST = +44; signal line is +40 but algorithm remains short
8/3/23; 1:46 PM EST = +30; signal line is +39
8/3/23; 1:25 PM EST = +44; signal line is +40 but algorithm remains short
8/2/23; 10:58 AM EST = +30; signal line is +39; go short 4518; (Benchmark SPX for 2023 = +17.7%)(Keybot algo this trade = +2.1%; Keybot algo for 2023 = +1.4%)(Actual results this trade = +3.9%; Actual results for 2023 = +2.9%)