Keystone's proprietary trading algorithm, Keybot the Quant, flipped to the short side after the opening bell at SPX 1348. The NYA lost 7750 which is very bearish. The VIX spikes over 20 which is very bearish. The retail sector broke down as well. Watch RTH 41.90. More information at Keybot's site;
http://www.keybotthequant.blogspot.com/
Note Added 7/23/12 at 4:12 PM: The quant remains bearish at the close today but the RTH recovered above 41.90 and the VIX fell back below 18.68, both helping the bulls float the markets upwards off the lows. The NYA remains under 7750 which is bearish.
Have to check the volume at day's to see if this selloff has any conviction.
ReplyDeleteSteve
Calculate a 'run rate' throughout the day to gauge volume Steve. The NYA, $NYA.X, is 165 million with the 10-day average at 713 million. It is 10:30 AM so that is one hour into a 6-1/2 hour day. Thus, the run rate, 165x6.5, is 1.1 mill which would blow away the average volume. Understandedly, it is early in the day with high volume expected. Check maybe around 11:30 AM, that would be 3 hours into the day, equate that volume to a run rate you can compare to the expected average volume. All this will keep you abreast throughout the day so then you can make trading decisions as the day moves along.
ReplyDelete11:30 AM would be two hours into the day, but you get the idea. Simply equate time, the 6 1/2 hour day and volume so you will not have to wait for the close to know how the volume is behaving.
DeleteHa! Market reverses as soon as Quantobot turns bearish!
ReplyDeletethat's not a real reversal IMHO, more a muted bounce of bottom. Watch SSTO and MACD in daily scale: both crossed from above today (actually SSTO allreay did Friday): sell signals are in place
ReplyDeleteglad to see keybot flipping short, this all starts to make sense. I've been buying shorts at key levels on the way up last week. Paying off nicely now. Did enter a long on friday (incase the market finished a wave iv down, with wave v up to 1390 to come), which was stopped out at the open for minimal loss. Now this could be wave III down...
ReplyDeleteHello Dave, to use the ole refrain, trading is not a sprint, it is a long marathon. If you are referencing Keybot think about a longer time frame than ten minutes. Keybot is designed to take the smoothest path thru the trading year and may stay on one side or the other for an extended period of time. So Keybot is not designed to flip back and forth at break neck speed, that is not its function. It is a steady eddy algo that provides great returns at low risk. Keystone's daily trading is the high risk, seat of your pants type trading where trades occur sometimes over minutes.
ReplyDeleteArnie, RTH 41.90 and VIX 18.75 is what is dictating market direction right now. RTH fell under 41.90 to create bearishness but now is above which created the market bounce todya. VIX remains above 18.75 so that continues to create market negativity. If bearish, you can throw confetti if you see RTH drop back under 41.90.