STOCK MARKET BEARISH -- SHORT

Keybot the Quant remains short after a wild and crazy day yesterday. Pope Powell brought the tablets down from On High that tell everyone how to trade but no one liked the inscription. A big selloff occurs in the stock market.

The quant flipped short last Monday, last week, and kept teasing a flip to the long side over the last week. The bears held the bulls at bay until yesterday morning when the internal parameters of the quant latched and the flip to the long side occurs. That did not last long; only about 4 hours. Banks failed after the Fed statement was released that cut by a quarter-point but also reduced the projected rate cuts for 2025 (that fuel the stock market higher). Volatility took off vertically like a rocket sinking the stock market and then semiconductors threw in the towel creating the bloodbath.

The robot flips back to the short side with a rare same-day whipsaw (this has occurred for the quant probably less than 10 times in the last 16 years). The bears are in charge with the algo number a huge 41 points below the signal line.

Bears need weaker utilities, commodities, and retail stocks to create more carnage. Bulls need higher banks and chips, and lower volatility, to stop the bloodbath.

Whittling it down to give you something to watch, it is a battle between chips and retail stocks. If the bulls can push SOX above 5070, they can stall the selling and create stabilization in the stock market, but MU sh*t the bed with earnings. Bears need RTH below 226.90 now less than a dollar away to guarantee more stock market weakness.

On the short trade that ran for 8 trading days from last Monday, everything was flat. On the last long trade that ran for a big 4 hours, the quant program loses a percent and the actual trading loses a couple percent. For the year thus far, with less than 2 weeks of trading remaining, the benchmark S&P 500 is up a huge +26% with back-to-back big up years. The quant program is up +10% this year and the actual trading generated by the quant is up +19% lagging the benchmark by 7 percentage-points. On the flip to the bull side, Keybot exited SDS and entered SSO. On the whipsaw back to the short side, Keybot exited SSO and entered SH. The whipsaw occurs so the robot drops down into single ETF's for the next 30 days. The stock market may become choppy and the use of non-leveraged ETF's reduces risk until the choppiness passes.

Bears win with RTH below 226.90, GTX below 3567 and/or UTIL below 965. If utilities fail, the US stock market will likely go into a crash profile. Bulls can stop the selling with SOX above 5070 and/or XLF above 48.83. Bulls are on an island of hopeless despair indefinitely unless they can push the VIX back below 17.15.

12/22/24; 7:00 PM EST =
12/20/24; 10:00 AM EST =
12/18/24; 3:16 PM EST = -14; signal line is +27
12/18/24; 2:52 PM EST = +2; signal line is +28
12/18/24; 2:45 PM EST = +16; signal line is +29; go short 6001; (Benchmark SPX for 2024 = +25.8%)(Keybot algo this trade = -1.0%; Keybot algo for 2024 = +10.2%)(Actual results this trade = -2.0%; Actual results for 2024 = +18.7%)
12/19/24; 2:16 PM EST = +16; signal line is +29 but algorithm remains long
12/18/24; 10:34 AM EST = +32; signal line is +30; go long 6062; (Benchmark SPX for 2024 = +27.1%)(Keybot algo this trade = -0.2%; Keybot algo for 2024 = +11.2%)(Actual results this trade = -0.1%; Actual results for 2024 = +20.7%)
12/18/24; 9:00 AM EST = +32; signal line is +30 but algorithm remains short
12/17/24; 12:44 PM EST = +32; signal line is +30 but algorithm remains short
12/17/24; 9:57 AM EST = +18; signal line is +31
12/15/24; 7:00 PM EST = +32; signal line is +31 but algorithm remains short
12/13/24; 9:36 AM EST = +32; signal line is +31 but algorithm remains short
12/12/24; 9:36 AM EST = +16; signal line is +31
12/11/24; 1:29 PM EST = +32; signal line is +31 but algorithm remains short
12/11/24; 1:11 PM EST = +16; signal line is +31
12/11/24; 11:22 AM EST = +32; signal line is +31 but algorithm remains short
12/11/24; 10:59 AM EST = +16; signal line is +30
12/10/24; 10:02 AM EST = +32; signal line is +31 but algorithm remains short
12/10/24; 9:42 AM EST = +16; signal line is +31
12/10/24; 9:36 AM EST = +32; signal line is +31 but algorithm remains short
12/9/24; 3:49 PM EST = +18; signal line is +31; go short 6052; (Benchmark SPX for 2024 = +26.9%)(Keybot algo this trade = +1.7%; Keybot algo for 2024 = +11.4%)(Actual results this trade = +3.3%; Actual results for 2024 = +20.8%)