STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant remains short as the stock market rocket launches to the upside to all-time record highs. It is bazaar. The SPX prints a new all-time high at 7758.21 and new all-time closing high at 7736.52 on 8/4/26 on Donnie hype.

In 18 years, the model has never displayed this type of behavior. The rally is purely news-driven with King Donnie Chump halting further military action in Iran on the weekend. Trumpski said the Strait of Hormuz may open yesterday. Then Bessent tag-teamed Trump promising an agreement by today. Oil plummets and stocks explode to the upside on the Iran War hype. Overnight, Trump says an agreement on the strait may occur today but Iran plays dumb and the Red Sea is now a problem. Iran is talking to Oman to make an agreement on the strait. What a mess. But the stock market is in party mode. If there was ever a time where everyone is partying with zero fear, it is now.

Utilities remain weak that is surprising since the rally would have been expected to lift all boats but it did not. Commodities weakened, mainly due to oil prices dropping, adding further bearishness to the stock market but the bulls managed to push chips high enough to help keep the bull rally going.

The coming days will tell if the model strayed off the reservation. Something has to give. The quant will have to capitulate and go long, or stocks will reverse to the downside. It likely completely depends on the so-called deal over the Strait of Hormuz that may be detailed today.  Welcome to the Twilight Zone.

The Iran War news is obviously the market driver along with utes, commodities and chips. The lines in the sand are UTIL 1124.50, GTX 5227 and SOX 12040. Utes and commodities create negativity while chips create positivity for stocks. The metrics do not matter when a big orange head is bloviating every 10 minutes to manipulate oil prices.

If UTIL or GTX turn bullish, either one will do, consider the imminent turn to the long side in play, and if the SPX moves above 7758, Keybot the Quant may flip long. The bears need to pull SOX below 12040 to maintain base negativity but, as highlighted above, the stock market is in Iran War hype mode and will live or die on the deal that King Donnie makes this week. It is weird stuff.

8/9/26; 7:00 PM EST =
8/7/26; 9:00 AM EST =
8/4/26; 11:16 AM EST = +22; signal line is +35
8/4/26; 9:36 AM EST = +6; signal line is +35
8/3/26; 10:55 AM EST = +20; signal line is +36
8/3/26; 10:07 AM EST = +36; signal line is +36 but algorithm remains short
8/2/26; 7:00 PM EST EOM = +20; signal line is +36