Keybot the Quant remains short as the stock market drama continues. The bears are in charge with the algo number 23 points below the signal line but equities remain buoyant. The buy the dip crowd is strong with traders and investors believing that stocks will never go down again.
Utilities, retail stocks, banks and volatility are the 4 key drivers of stock market direction currently. For the bears, the UTIL, or DJU, line in the sand is 1068 with price starting at 1091. Bears are having difficulty making downside progress but if 1068 fails, it is light's out. You will see stocks collapsing faster than a prom dress at midnight.
The bulls remain in the game benefiting from end of year joy, the ongoing AI and chip hype, and the relentless dip-buyers. Bulls need XRT above 87.15, XLF above 54.05 and VIX below 17.00. The retail sector needs to gain only about a percent; ditto the banksters. It would also be nothing for the VIX to drop through 17 so the bulls have it on a silver platter if they want it back.
If 2 of the 3 parameters turn bullish, you can check the VIX in overnight trading and the other two in the pre-market, consider the imminent turn to the long side to be in play, and if the SPX moves above 6964, that would be about a +25 point gain, Keybot the Quant will likely flip long.
So the game is set. Bears need UTIL below 1068 and you will see blood and carnage on Wall Street like never before. The bulls simply need a percent gain in retail stocks and banks, and the VIX to drop below 17, and they will likely retake control of the stock market.
Keybot the Quant prints one prescheduled number this week on Friday morning before the opening bell. For now, the bears continue to growl and the Clash howls. London Calling.
2/8/26;
7:00 PM EST =
2/6/26;
9:00 AM EST =
2/1/26;
7:00 PM EST EOM = -8; signal
line is +15
1/30/26;
11:02 AM EST = -8; signal line
is +16
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