STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long for now.  The market bears pushed lower but never really threatened SPX 1273.  The market bulls pushed higher and are currently in the continuing fight for the SPX 12-month MA at 1280.30-ish. This level is very important as is any touch of the 1282 handle that would ignite a strong bullish move upwards for the markets.

Thus, keep on watching the result of the fight over the SPX 12-month MA, as well as 1282, and 1273.  The SPX has surprisingly stayed within that 1275-1281 sideways range today. For now, the bulls continue to hang on but the markets are very unstable currently.

1/15/12; 7:00 PM EST =

1/13/12; 10:00 AM EST =

1/9/12; 2:03 PM EST = +20; signal line is +12

1/9/12; 10:39 AM EST = +6; signal line is +12 but algorithm says stay long

1/9/12; 10:27 AM EST = +20; signal line is +12

1/8/12; 7:00 PM EST = +6; signal line is +11 but algorithm says stay long

STOCK MARKET BULLISH -- LONG - CAUTION

Keybot the Quant is long to begin the new trading week but the algorithm is set up to flip short at anytime.  Monday's open offers drama since the algo number is under the signal line and if the other programming rules line up, and the futures are about four points negative, Keybot should flip to the bear side.  Watch the SPX 1273 level.  SPX begins at 1277. If the 1273 is lost to the downside, Keybot will likely flip to the short side and the markets should be falling on substantial downside pressure. Thus, SPX 1273 takes on epic significance tomorrow.

Monday's trade depends on the Merkozy meeting. If the Europe news is encouraging, the market bulls need to push the SPX higher to touch the 1282 handle, if so, the upside will rocket higher with a wild bull orgy move. A move thru 1275-1280 is sideways action. Note the tight five point range so chances are that the SPX will make a decision on which way to move and it should have a significant impact on markets. Retail is very important this week, so watch RTH closely to see if it collapses. RTH 110.25 is the key level which will cause significant harm to the broad markets.  Other key sector levels to watch are JJC 44.75, SOX 367.60, XLF 12.80, CRB 315.00 and most importantly, the SPX 12-month MA at 1280-ish.

Keybot prints only one pre-scheduled number this week on Friday morning.  Monday's open will be an exciting start if the futures are red. Caution is warranted since a turn appears imminent.

1/15/12; 7:00 PM EST =

1/13/12; 10:00 AM EST =

1/8/12; 7:00 PM EST = +6; signal line is +11 but algorithm says stay long

1/6/12; 12:40 PM EST = +6; signal line is +10 but algorithm says stay long

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long over the weekend. The highlights for Monday's trading can be projected after the Sunday number prints tomorrow. The algo wants to go short but is held back by other rules.  It appears that if the SPX can drop about four points, from 1277 to 1273, it is likely that Keybot would flip to the short side on Monday. Note that the SPX lost the battle with the 12-month MA at 1280.06, closing lower, placing a small feather in the market bears cap. Obviously, caution is warranted concerning the broad markets since a turn may be imminent.

1/15/12; 7:00 PM EST =

1/13/12; 10:00 AM EST =

1/8/12; 7:00 PM EST =

1/6/12; 12:40 PM EST = +6; signal line is +10 but algorithm says stay long

1/6/12; 11:33 AM EST = +20; signal line is +10

1/6/12; 9:30 AM EST = +6; signal line is +8 but algorithm says stay long

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long but is setting up to flip short soon as seen by the algo numbers printing lower numbers than the signal line. Other programming rules, however, are holding the algo back and maintaining the long side, for now.  The SPX is now in a big fight with the 12-month MA at 1280.28.  Last SPX print is 1280.56. Watch this closely. For now, Keybot is long and will probably stay long into the weekend unless some serious selling occurrs driving the SPX down towards 1265. Markets ae unstable.  Caution is warranted.

1/8/12; 7:00 PM EST =

1/6/12; 12:40 PM EST = +6; signal line is +10 but algorithm says stay long

1/6/12; 11:33 AM EST = +20; signal line is +10

1/6/12; 9:30 AM EST = +6; signal line is +8 but algorithm says stay long

1/6/12; 9:00 AM EST = +20; signal line is +7

1/5/12; 3:40 PM EST = +20; signal line is +6

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long after the pre-scheduled number shows no change in the algo number and a one tick higher bump in the signal line. The Jobs Report was released minutes ago causing a spike up in futures markets but the numbers are settling back towards the flat line.

Watch to see if the market bulls can push above SPX 1283 to start the rally party again. Also, SOX 367.85, RTH 110.25, JJC 44.75 and CRB 314.26 will dictate broad market direction today.  Semi's and retail support the markets on the bullish side while copper and commodities support the bears.  One of these characters will make a move. The dollar is bouyant which shouild keep copper and the commodities in check. The SPX 12-month MA at 1280.33 is very important today, see if today's close is above or below.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST = +20; signal line is +7

1/5/12; 3:40 PM EST = +20; signal line is +6

1/5/12; 2:27 PM EST = +6; signal line is +5

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long despite the pre-market excitement today.  After the open, the SPX dropped thru the 1268 level ushering in further weakness but the tell was the semiconductors.  Instead of the SOX dropping under the 367.85 level to accelerate the market selling, it jumped higher and finished the day at 374.17 almost seven points above any danger. The retail sector, RTH, was weak on the lower TGT news but remained above the 110.25 danger line.

Thus, the market bears had no oomph and the broad indexes floated upwards.  Once SPX 1278-1279 resistance gave way the upside accelerated. The SPX closed above the 12-month MA which is extremely important. This represents a secular bull-bear line and the SPX closed a hair above on the secular bull side for the first time in five months.  Watch SPX 1280.33 (12-mth MA) closely tomorrow.

Copper and commodities remain weak due to the stronger dollar. Watch SOX 367.85, RTH 110.25 and CRB 314.26.  For the SPX, starting at 1281, market bulls only need to push upwards a couple of points, up and over 1283, to accelerate the upside and party into the weekend.  The market bears need to push 16 points lower to 1265 to start the negative momo again, a formidable task. A move thru 1266-1280 is sideways action.

The jobs circus is on tap in the morning. Consensus has turned more bullish after the ADP Employment data this morning. The futures will obviously react. Keybot has a pre-scheduled printout at 9 AM so that will serve as a market update in front of Friday's action. For now, Keybot remains on the long side.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/5/12; 3:40 PM EST = +20; signal line is +6

1/5/12; 2:27 PM EST = +6; signal line is +5

1/5/12; 1:25 AM EST = +20; signal line is +3

1/4/12; 2:40 PM EST = +6; signal line is +1

1/4/12; 10:10 AM EST = -10; signal line is 0 but algorithm says stay long

1/4/12; 9:42 AM EST = +6; signal line is -2

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant is long for the opening bell but that may not last long.  In yesterday's action, the robot wanted to go short as shown by the algo number dropping under the signal line (-10 is lower than -3 if you remember how to handle negative numbers), but other programming rules have to be met before the algorithm triggers the flip in position. In the afternoon yesterday, the semiconductors moved strongly higher which helped maintain broad market buoyancy.

Today is very important.  Note that the algo number is now only five measley points above the signal line. The quant is itching to go short but it is disciplined waiting for the proper signals to line up. If SOX drops under 367.85, the algo number will most definitely be under the signal line indicating selling pressure in the markets. If the SPX drops under 1268 today, and holds under for about ten minutes, it is highly likely that Keybot will flip to the short side.

Watch the financials, XLF, now at 13.30, well above the algo's danger line at 12.80. Watch retail, RTH, which appears ripe for a tumble. If the RTH loses the 110.25 level, the broad markets will be selling off strongly.  For the SPX today, starting at 1277.30, the bulls have the easy road to hoe, only needing to touch a 1279 handle and the upside will accelerate.  The futures, however, show the S&P heading for a ten point drop at the open.  For the market bears, the 1268 level must give way, if you see a 1267 on the screen, the down move should accelerate strongly and Keybot will more than likely flip to the short side. Markets are very unstable. A turn appears imminent.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/4/12; 2:40 PM EST = +6; signal line is +1

1/4/12; 10:10 AM EST = -10; signal line is 0 but algorithm says stay long

1/4/12; 9:42 AM EST = +6; signal line is -2

1/4/12; 9:30 AM EST = -10; signal line is -3 but algorithm says stay long

1/3/12; 3:22 PM EST = +22; signal line is -4

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains bullish but the algorithm wants to go short. Other programing rules are holding it back. If the SPX drops under 1259, Keybot should flip short, so the market bulls will be fighting to prevent that, and at 1269 now, remain ten points above.

Copper, JJC, collapsed down to 44. SOX remains under 368 so the bears got game today and moving forward, unless these levels are overtaken again. Markets ae unstable.  Caution required.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/4/12; 10:10 AM EST = -10; signal line is 0 but algorithm says stay long

1/4/12; 9:42 AM EST = +6; signal line is -2

1/4/12; 9:30 AM EST = -10; signal line is -3 but algorithm says stay long

1/3/12; 3:22 PM EST = +22; signal line is -4

1/3/12; 2:42 PM EST = +36; signal line is -6

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long although the algorithm wanted to flip short at the opening bell. Other programming rules held it back. The algo number dropped under the signal line but has now recovered again.  The caution flag is back out and yesterday's bullish party is long forgotten.

CRB 315 has held as resistance so far so this favors bears.  The semiconductors, SOX, collapsed down thru 368 so this is a large feather in the bears cap.  The market bears have strength as long as the SOX stays under 368.  Copper is dancing on the bull-bear line today at JJC 44.75, now a hair on the bull side at 44.83.  Keep watching these levels since the interplay dictates broad market direction today.  If the markets sell off today, watch SPX 1259 level since if that is lost, Keybot will likely flip to the short side.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/4/12; 9:42 AM EST = +6; signal line is -2

1/4/12; 9:30 AM EST = -10; signal line is -3 but algorithm says stay long

1/3/12; 3:22 PM EST = +22; signal line is -4

1/3/12; 2:42 PM EST = +36; signal line is -6

STOCK MARKET BULLISH -- LONG

Keybot the Quant remains long after a bullish day of trading to begin 2012. The algo starts the year with an extremely active session, printing nine numbers today. Semiconductors and copper created the bulk of the bull fuel today.  The SPX gained the 12-month MA to try and revese a five-month secular bearish trend, but, by the close, could not stay above the moving average giving the bears a small victory amongst today's bull orgy.

SOX closed dead-on the algo's number of interest at 368.60.  How do you like that? For Wednesday, the SOX will continue to create broad market buoyancy unless it loses the 368.00 level.  Copper was up 3% today and will continue to support the market bulls as long as JJC stays above 44.75.  The commodities, CRB, will be of major interest first thing in the morning. The CRB is at 313.37.  The algorithm is interested in the 315.00 level. Thus, if the CRB moves above 315, the markets will rally big-time to the upside, the wine will flow like water.  If CRB stays under 315, it tells you that the market bulls do not have much juice.

For the SPX for Wednesday, starting at 1277, if the market bulls can push upwards to touch the 1285 handle, the upside will explode higher. The CRB will likely be over 315 and an upside party will be in full force for the broad indexes.  The market bears need to push back down to the starting year number at 1258, retracing today's move of 19 points, to regain negative momo. This is a formidable task so the bears will simply try to prevent CRB from printing 315 and at the same time drive JJC and SOX lower.  A move thru SPX 1260-1283 is sideways action.

Stay on guard. The caution flag is not out but vigilance is required.  The algo clicked off nine numbers and sometimes an active day like this indicates instability and a market that is ready to change trend.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/3/12; 3:22 PM EST = +22; signal line is -4

1/3/12; 2:42 PM EST = +36; signal line is -6

1/3/12; 12:59 PM EST = +22; signal line is -8

1/3/12; 12:48 PM EST = +6; signal line is -10

1/3/12; 12:30 PM EST = +22; signal line is -11

1/3/12; 10:00 AM EST = +36; signal line is -14

1/3/12; 9:46 AM EST = +22; signal line is -16

1/3/12; 9:36 AM EST = +36; signal line is -17

1/3/12; 9:30 AM EST = +22; signal line is -19

1/1/12; 7:00 PM EST Starting 2012 Data = -10; signal line is -20

1/1/12; Begin 2012 Data Set = -10; signal line is -20; go long 1258; (Benchmark SPX for 2012  = 0%)(Keybot this trade = 0%; Keybot for 2012 = 0%)(Actual this trade = 0%; Actual for 2012 = 0%)

STOCK MARKET BULLISH -- LONG

Keybot the Quant is long as 2012 gets underway.  The market bulls came to play today. SOX blew up thru 368.60 so the semiconductors are driving the markets higher.  Copper jumped as well which is adding more bull fuel.  A trifecta occurs since the SPX price is triggering further upside signals for the algo. This early move is a game-changing jump in the markets--as long as it holds.

Keybot is active out of the gate jumping 32 points at the opening print from -10 to +22. The algo number is now 50 points above the signal line so the bulls are on cruise control with their feet up.  The caution flag is taken down. SPX 1280-1281 is important today.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/3/12; 10:00 AM EST = +36; signal line is -14

1/3/12; 9:46 AM EST = +22; signal line is -16

1/3/12; 9:36 AM EST = +36; signal line is -17

1/3/12; 9:30 AM EST = +22; signal line is -19

1/1/12; 7:00 PM EST Starting 2012 Data = -10; signal line is -20

1/1/12; Begin 2012 Data Set = -10; signal line is -20; go long 1258; (Benchmark SPX for 2012  = 0%)(Keybot this trade = 0%; Keybot for 2012 = 0%)(Actual this trade = 0%; Actual for 2012 = 0%)

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long to start the new trading year.  Trading resumes on Tuesday, 1/3/12. The main pillars of support for these markets currently are the utilities (UTIL), retail (RTH), financials (XLF), and lower volatility (VIX). The market bears are keeping things in check by beating on the semiconductors (SOX), copper (JJC) and commodities (CRB), the latter two must be watched in relation to disinflation and deflation.

For the drama ending 2011, the algorithm was focused on semiconductors, retail and financials. These three remain of interest and will dictate broad market direction in the initial days of 2012.  Watch SOX 368.60, RTH 110.25 and XLF 12.80. These levels may change slightly as trading gets underway on Tuesday.  SOX is now bearish while retail and financials are bullish.  Whichever way any of these three characters move, will dictate broad market direction.  If SOX regains the 368.60 the broad indexes will move much higher and return to Santa Claus rally mode.  If not, the semi's will create further market weakness. If the RTH moves down under 110.25, this will have a noticeable impact on the markets, the major indexes will be selling off substantially.  Likewise XLF 12.80. But, if the RTH and XLF remain bullish and buoyant, so will the broad markets.

For the SPX on Tuesday, starting at 1258, the same starting point as 2011, one year ago, the market bears have the wind at their backs. Any sign of red futures overnight Monday night, even pennies on the red side, will lead to a market sell off to start the year, a likely test of 1252 support, perhaps down to 1247.  The market bulls need to move six points higher and touch the 1264 handle, if so, the year will begin with an upside orgy.  SPX would then likely test 1267-1268, perhaps higher. A move thru 1258-1263 is sideways action.

Look for the SPX move either under 1258, or over 1264. The 200-day MA is 1258.82. The caution flag remains out. Stay on guard using the semi's, retail and financials as the leading sectors. Keybot prints a pre-scheduled number on Friday morning this week. Happy New Year and Good Luck to all in 2012.

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/1/12; 7:00 PM EST Starting 2012 Data = -10; signal line is -20

1/1/12; Begin 2012 Data Set = -10; signal line is -20; go long 1258; (Benchmark SPX for 2012  = 0%)(Keybot this trade = 0%; Keybot for 2012 = 0%)(Actual this trade = 0%; Actual for 2012 = 0%)

Keybot the Quant Historical Results 2008-2012

Keybot the Quant, after years of refinement and testing, went live in November 2008. Interesting timing considering that was in the middle of the Fall 2008 crash! Keybot handled it like a champ, however. Thus, in three years of operation now, 2009, 2010 and 2011, the Keybot the Quant algorithm has returned 153% by simply adding the annual percentage gains. Allowing gains to roll over and accumulate, compounding, however, results in a 335% gain over the same three year period. The algorithm began steady trading of ETF's in 2010 and all of 2011.  Thus, the only data concerning the actual ETF trades are for 2011 only and that resulted in a 37% gain this past year.

2012 Year to Date Returns (thru 1/1/12):
SPX Benchmark is 0%
Keybot the Quant Algorithm is 0%
Keybot the Quant Actual Trading is 0%

2011 Year to Date Returns:
SPX Benchmark is 0%
Keybot the Quant Algorithm was up +33%
Keybot the Quant Actual Trading was up +37%

2010 Year to Date Returns:
SPX Benchmark was up +12.8%
Keybot the Quant Algorithm was up +40%

2009 Year to Date Returns:
SPX Benchmark was 23.5%
Keybot the Quant Algorithm was up +80%

2008:
Keybot the Quant is born 11/23/08

SPX Daily Chart Showing Keybot the Quant 2011 Results

This chart displays the majority of algorithm signals for 2011. The SPX Benchmark Index was flat as a pancake starting at 1258 and ending at 1258 for 0% return. The Keybot the Quant algorithm program returned 33% handlily beating the SPX. The actual ETF trading as per the algorithm signals resulted in a 37% return for 2011.

Keybot started 2011 by riding the bullishness in January and February. Markets were choppy from March into summer time. Many of the large robots and algorithms were unplugged since the trading was low volume and low volatility which is difficult for the majority of programs to handle. During this period, major money managers lost millions in customer accounts since as soon as the markets started to commit to a certain direction, the funds piled in, only to have their heads handed to them. Then the same in reverse, again and again; choppy difficult trading period during spring-summer.

The highlight of the year was Keybot going short 7/11/11 and covering the trade on 8/23/11, riding the August waterfall crash from 1324 to 1146, 178 handles, a huge gain. Then, choppy markets were back for August-September, again picking the money managers' pockets in sideways action. Keybot then rode the October rally from 10/6/11 to 10/20/11, 1146 to 1206, a 60 handle gain. The algo also capitalized on the November tumble going short at 11/15/11 and covering 11/28/11, from 1247 to 1194, a 53 handle gain. Then the rally from there, 1194 back up to 1234, a 40 handle gain.

Keybot is not designed to call exact tops and bottoms; it is programmed to take the smoothest and most profitable path thru any trading year constantly choosing either the short side or long side position only. Keybot begins 2012 on the long side, bullish, from SPX 1258 (actually SPX 1240 but the algo had to be zeroed for 2012 data). Extreme caution is recommended moving forward; many unknowns are ahead for 2012.

The Keystone Oscillator 2011

The Keystone Oscillator is a major component of Keybot and provides the turn signals.  When the algo number dips under the signal line that signals time to go short. When the algo number moves above the signal line that signals time to go long the market.  This chart shows the interplay between the algo number (Series 1) and the signal line (Series 2) for 2011. This data is based on weekly numbers so it serves as a simplified version of the year.

Note the bullishness in January and February with the algo number favoring the upper side of the signal line.  Note how the blue line dropped under the red line in July to signal the top in front of the August waterfall crash.  Going into 2012, the blue line is above the red line so Keybot is currently long the market.  Note the overall downward-sloping vibe for the chart, the highs for Keybot were in early 2011. The low number for Keybot was after the August crash occurred.

Like any oscillator, the overbot and oversold levels (+ and - 80% levels or +/- 70% levels) indicate that a trend change is coming, and the 0% level serves as a direct market indication of bullishness or bearishness. Early in the year the 80%-ish numbers show markets overextended to the top side.  The August bottom was marked by the blue line under -80%. Currently the algo number and signal line are moving sideways just under the 0 line indicating that bulls and bears are fighting it out in a tug-o-war and it is unclear which side will win. Keybot will show the way.

2011 RESULTS

Another successful year for Keybot the Quant. Data is now zeroed to begin tallying 2012.

2/5/12; 7:00 PM EST =

2/3/12; 9:00 AM EST =

1/31/12; 10:00 AM EST =

1/29/12; 7:00 PM EST =

1/27/12; 10:00 AM EST =

1/22/12; 7:00 PM EST =

1/19/12; 9:00 AM EST =

1/15/12; 7:00 PM EST =

1/13/12; 10:00 AM EST =

1/8/12; 7:00 PM EST =

1/6/12; 9:00 AM EST =

1/1/12; 7:00 PM EST Starting 2012 Data = -10; signal line is -20

1/1/12; Begin 2012 Data Set = -10; signal line is -20; go long 1258; (Benchmark SPX for 2012  = 0%)(Keybot this trade = 0%; Keybot for 2012 = 0%)(Actual this trade = 0%; Actual for 2012 = 0%)

Keybot the Quant Begins 2012 on the Long Side from SPX 1258. All Data 0%. Begin 2012.

End – End – End – End – End – End – End – End – End – End – End

-------------------------------------------------------------------------------

START 2012 PROGRAM

Begin Printing

Mark and Set

Time and Date Stamp 1/1/12; 6:11 AM EST

START 2012 PROGRAM

End – End – End – End – End – End – End – End – End – End – End

--------------------------------------------------------------------------------

2011 RESULTS:

SPX Benchmark Final 2011:  0% Return (SPX Started at 1258 and Ended at 1258)

Keybot the Quant Final 2011:  37% Return (Highlight was Keybot Riding the August 2011 Crash Downwards on the Short Side)

Keybot the Quant is a long-short algorithm that oscillates between a bullish position and a bearish position with no middle ground.

Number of Position Moves (Long to Short or Short to Long) During 2011:  44

Number of Broker Commissions Required During 2011:  86

Benchmark SPX During 2012:  0% Return

Keybot the Quant Algorithm (the Quant Program Only) During 2012: +32.7% Return

Keybot the Quant Actual Trading (Actual Trading with the Quant Using ETF’s) During 2012:  +36.9% Return

Begin Printing

FINAL 2011

Mark and Set

Time and Date Stamp 1/1/12; 5:19 AM EST

End – End – End – End – End – End – End – End – End – End – End

-----------------------------------------------------------------------------------

1/1/12; Algorithm Zeroed for 2012 Data = -10; signal line is -20; go long 1258; (Benchmark SPX for 2011 Final = 0%)(Keybot this trade = +1.5%; Keybot for 2011 Final = +32.7%)(Actual this trade via MDY = +1.4%; Actual for 2011 Final = +36.9%)

1/1/12; 7:00 PM EST EOM EOQ4 EOY2011 = -10; signal line is -20

12/27/11; 3:37 PM EST = -10; signal line is -21

12/27/11; 11:09 AM EST = +6; signal line is -21

12/27/11; 10:52 AM EST = -10; signal line is -22

12/27/11; 10:00 AM EST = +6; signal line is -21

12/27/11; 9:47 AM EST = +6; signal line is -20

12/25/11; 7:00 PM EST = -10; signal line is -20

12/22/11; 10:00 AM EST = -10; signal line is -20

12/21/11; 2:36 PM EST = -10; signal line is -20

12/21/11; 9:35 AM EST = -26; signal line is -19 but algorithm says stay long

12/20/11; 2:49 PM EST = -10; signal line is -17; go long 1240; (Benchmark SPX for 2011=-1.4%)(Keybot this trade=-0.5%; Keybot for 2011=+31.2%)(Actual this trade via RWM=-1.5%; Actual for 2011=+35.5%)

12/20/11; 2:32 PM EST = -10; signal line is -17 but algorithm says stay short

12/20/11; 9:30 AM EST = -26; signal line is -16

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the last trading day of the year is set to begin.  The algo is idling along and has not printed a number since Tuesday afternoon.  The XLF remains above 12.80 so this keeps broad markets buoyant.  The semiconductors, SOX, are under 368.60 keeping the bears happy and preventing any substantial broad market move up. The retail sector, RTH, requires watching moving forward.  RTH is now at 112.48 firmly supporting the market bulls, but the negative divergence in place points to a downfall for retail as 2012 begins.

For now, XLF and SOX dictate broad market direction.  The bears will not make any headway down unless XLF fails at 12.80.  The bulls will not make any headway up unless the SOX moves above 368.60.  Whichever of these two flinches first will tell you the path of the broad markets.

For the SPX today, starting at 1263, if the market bulls can push higher by only a half a buck, and get up and over 1263.50, the day will go the bulls way and the broad indexes will finish on an up note.  The market bears need to take back yesterday's gains to regain momo which is a formidable task. The bulls, however, managed to retrace Wednesday's down move yesterday. Markets will float along sideways to end the year unless the XLF or SOX make a committment.  The SPX will probably dance around the starting year number of 1258 today as the last trading day plays out and determines whether the S&P finishes positive or negative on the year.

Keybot enjoys another highly successful year, navigating a prosperous path thru the 2011 mess.  The model will be closed out for 2011 after today's session and the results tallied for the record books.  The 2012 tallies will begin when trading starts for the new year on Tuesday, 1/2/12. Keybot wishes all a Happy and Healthy New Year, and a prosperous one as well.  With Keybot at the helm the prosperous part appears highly likely. Stay on guard. Markets remain unstable.

1/1/12; 7:00 PM EST EOM EOQ4 EOY2011 =

12/27/11; 3:37 PM EST = -10; signal line is -21

12/27/11; 11:09 AM EST = +6; signal line is -21

12/27/11; 10:52 AM EST = -10; signal line is -22

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as broad indexes languished all day long.  The algo idled along calmly all day without printing any numbers. The Italy bond auctions in the morning have traders on edge and prone to hit the sell button today. The SOX collpased at the open and a run up to 368.60 was never considered. This semiconductor weakness fueled the Nasdaq downside and overall market weakness.

Since semi's have now given up the ghost, retail, RTH, and financials, XLF, are now in the algorithm's focus.  The RTH is two points above danger at 110-ish but the XLF is at 12.86 only six pennies above danger at 12.80. If the XLF drops under 12.80, all Hades will break loose, the broad markets will tumble lower.  The market bulls will try to prevent the loss of XLF 12.80 with all their might. XLF will determine the fate of the markets when the bell rings to begin the Thursday session.

For the SPX, starting at 1250, the bears have the wind at their backs since the close was near the lows.  If the market bears can push the SPX under 1248.50, the downside selling will accelerate. The market bulls need to retrace today's tumble to regain the momo but since that is a fomidable task, the bulls will simply fight to stop from losing XLF 12.80.  A move thru SPX 1250-1264 is sideways action.

SPX support exists at 1249, that held today, and 1247.  A breach of 1247 to the downside likely correlates to the XLF losing the 12.80 level and serious selling entering the broad markets, and, most importantly, Keybot probably flipping to the short side. XLF 12.80 is the key tomorrow, it will determine broad market direction.

1/1/12; 7:00 PM EST EOM EOQ4 EOY2011 =

12/27/11; 3:37 PM EST = -10; signal line is -21

12/27/11; 11:09 AM EST = +6; signal line is -21

12/27/11; 10:52 AM EST = -10; signal line is -22

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as semiconductors weakened into the close.  The SOX dropped under 368.60 so the markets faded into the bell. Watch SOX 368.60 again tomorrow.  If markets weaken further, watch XLF 12.82 level again, tonight the XLF closed at 13.07.

For the SPX in the Wednesday session, starting at 1265.43, the market bears need to push lower three points to 1262 and the selling will accelerate.  The SPX would venture down to the starting year number at 1258.  The market bulls need to push the SPX up to touch 1270, if so, the upside will accelerate.  A move thru 1263-1268 is sideways action. The broad markets can not head higher without the SOX moving above 368.60.

Keybot had an active start to the holiday-shortened trading week kicking off five numbers today, one that was pre-scheduled. The algo number is only 11 ticks away from the signal line so caution is required.  Financials, XLF, require close watching moving forward.

1/1/12; 7:00 PM EST EOM EOQ4 EOY2011 =

12/27/11; 3:37 PM EST = -10; signal line is -21

12/27/11; 11:09 AM EST = +6; signal line is -21

12/27/11; 10:52 AM EST = -10; signal line is -22

12/27/11; 10:00 AM EST = +6; signal line is -21

12/27/11; 9:47 AM EST = +6; signal line is -20

12/25/11; 7:00 PM EST = -10; signal line is -20

STOCK MARKET BULLISH -- LONG -- CAUTION

Keybot the Quant remains long as the algo clicked off two more numbers before lunch time today.  The semiconductors, SOX, fell under the quant's key number of 368.60 ushering in the broad market weakness but then moved back above before lunch time sending the markets back up.  SOX is now printing 370.88 over two points above danger so the bulls are on cruise control and the SPX floats upward.

1/1/12; 7:00 PM EST EOM EOQ4 EOY2011 =

12/27/11; 11:09 AM EST = +6; signal line is -21

12/27/11; 10:52 AM EST = -10; signal line is -22

12/27/11; 10:00 AM EST = +6; signal line is -21

12/27/11; 9:47 AM EST = +6; signal line is -20

12/25/11; 7:00 PM EST = -10; signal line is -20

12/22/11; 10:00 AM EST = -10; signal line is -20

12/21/11; 2:36 PM EST = -10; signal line is -20

12/21/11; 9:35 AM EST = -26; signal line is -19 but algorithm says stay long

12/20/11; 2:49 PM EST = -10; signal line is -17; go long 1240; (Benchmark SPX for 2011=-1.4%)(Keybot this trade=-0.5%; Keybot for 2011=+31.2%)(Actual this trade via RWM=-1.5%; Actual for 2011=+35.5%)