STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant flips to the long side this morning at the opening bell at SPX 5039. The upside orgy in stocks is so obscene it would make Caligula blush. How does it feel?

The quant wanted to flip back to the long side all this week. Monday was a holiday. The NVDA euphoria put things over the top today sending stocks into the stratosphere. Ground control to Major Tom.

But coming back down to Earth, the path ahead for the US stock market is dictated by utes and volatility. VIX 14.42 is the bull/bear line in the sand. Write that number on your forehead with a Sharpie. VIX begins trading, in the wee hours of tomorrow morning at 14.54, and will provide a heads-up on the day ahead. Volatility is in the bear camp now but only by 12 measly cents. Watch it like a hawk since bears win above VIX 14.42 and bulls win below 14.42.

The UTIL 838 palindrome is the key bull/bear line in the sand for this week and the bulls have managed to keep the utes buoyant now at 846. The stock market will drop if UTIL falls below 838 tomorrow and Keybot the Quant would also be in position to whipsaw back to the short side. That is easy enough to understand but the plot thickens.

The UTIL 838 becomes meaningless at 4 PM EST tomorrow and is replaced with 863.50 for all of next week. Thus, watch UTIL at the closing bell because a closing price below 863.50 spells big trouble for stocks next week. The bulls got work to do starting at 846 (bulls need a gain of 18 points in UTIL tomorrow to keep happy bull time going next week).

If UTIL drops below 838 tomorrow, and the SPX drops below 5039, Keybot the Quant will likely whipsaw back to the short side. If UTIL remains above 838 tomorrow but ends the week below 863.50, Keybot the Quant will be itching to go short next week which could occur Monday or Tuesday.

Interestingly, the bulls better bring game tomorrow since they need both the VIX to drop below 14.42 and UTIL to rally above 863.50 to guarantee that the bull party continues next week; otherwise, the Nvidia punchbowl will go empty.

For the last trade that ran for only one week, the quant program loses a couple percent and the actual trading loses about -4%. For the year thus far, the benchmark S&P 500, that is the US stock market, is up almost +6%, mainly on AI hype and the chip orgy and the expectation for an accommodative Fed. The Keybot the Quant algo program is dead flat on the year and the actual trading generated by the quant is down a couple percent so far in 2024. It is another year of choppy, whipsaw slop. The quant exits SDS and enters SSO remaining in the 2x leveraged ETF's.

Bears need UTIL below 838 and SPX below 5039 to whipsaw short again. Bulls need VIX below 14.42 that will signal further upside in stocks into the weekend. If VIX remains in the bear camp and UTIL closes below 863.50 tomorrow, there will be Hell to pay in US stocks next week.

For now, the bulls rule and this evening they are planning ways to force Uncle Vix's head to the floor. The ole codger keeps popping-up like a beach ball underwater. Maybe he has a baby's brain and an old man's heart.

2/25/24; 7:00 PM EST =
2/22/24; 2:21 PM EST = +34; signal line is +24
2/22/24; 9:30 AM EST = +48; signal line is +24; go long 5039; (Benchmark SPX for 2024 = +5.6%)(Keybot algo this trade = -2.0%; Keybot algo for 2024 = -0.1%)(Actual results this trade = -3.9%; Actual results for 2024 = -1.5%)
2/22/24; 3:06 AM EST = +32; signal line is +25 but algorithm remains short
2/20/24; 9:38 AM EST = +32; signal line is +25 but algorithm remains short
2/19/24; 3:06 AM EST = +18; signal line is +24
2/18/24; 7:00 PM EST = +32; signal line is +25 but algorithm remains short
2/16/24; 10:00 AM EST = +32; signal line is +26 but algorithm remains short
2/16/24; 9:36 AM EST = +32; signal line is +26 but algorithm remains short
2/16/24; 9:00 AM EST = +16; signal line is +27
2/14/24; 3:18 PM EST = +16; signal line is +27
2/14/24; 10:56 AM EST = +2; signal line is +27
2/14/24; 9:36 AM EST = +16; signal line is +28
2/13/24; 2:07 PM EST = +2; signal line is +29; go short 4939; (Benchmark SPX for 2024 = +3.5%)(Keybot algo this trade = +2.6%; Keybot algo for 2024 = +1.9%)(Actual results this trade = +2.7%; Actual results for 2024 = +2.4%)