Tuesday, November 24, 2020

CPC and CPCE Put/Call Ratios Daily Charts; Significant Stock Market Top is At Hand




The bullish euphoria is off the charts. Traders and investors are giddy, drunk as skunks off Fed wine, and shooting-up with vaccines, buying any stock with a heartbeat. It is entertaining to watch. All you need to know is the comeuppance is near, very near. Plan accordingly. The low put/calls indicate a significant stock market top is at hand right now.

Throw the longs overboard and bring on and add to the shorts. Short all rallies ahead but as the previous SPX 2-hour, daily and weekly charts indicate, with negative divergence, a top is occurring now in all three of these time frames, so short regardless of a rally or not. The NYHL also signals a top in the stock market. All the stars have aligned. The bears only need to blow on the stock market and that should cause it to fall over. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended



Stocks jump wildly higher on news that former Federal Reserve Chair Yellen, Queen of the Doves, will takeover as Treasury Secretary (Mnuchin's job); she will sign the US money. The Dow tags 30K. Indexes keep printing or teasing new record highs.

The SPX weekly chart has finally set up with universal negative divergence across all its indicators. It's cooked. Stick a fork in it. The choppy sideways to up bias with stocks the last couple weeks is due to the PFE vaccine rally, then the MRNA vaccine rally, then the AZN vaccine rally, and lastly, the Yellen Rally. Some of today's joyous 58 point pop in the SPX is attributed to the start of the transition of the presidency but the Yellen appointment is far more important. She will do everything in her power to try to push fiscal stimulus through while cheerleading Fed Chairman Powell to print money endlessly (monetary stimulus).

The red lines show the negative divergence now in play across all chart indicators as price made the higher high today. This is the top unless happy talk occurs to extend the fun again. Price also violated the upper band so the middle band, the 20-week MA, at 3403, is in play and lower band at 3166. Price is extended above the moving average ribbon requiring a mean reversion lower. The red rising wedges are ominous since the collapses from this pattern can be quite dramatic.

A neggie d smackdown is needed to put price back in its place. Price is elevated due to the vaccine and stimulus hype, Yellen easy money joy, and perhaps an end to the King Donnie baby saga at the Whitehouse. 

Barring anymore happy talk, the weekly chart is ready to receive a spank down in the weekly time frame (a multi-week selloff begins). We shall see what the bears got. It is odd timing however, with the holiday. Typically, stocks are bullish into a holiday but the stock market is overdue to crack and the low put/calls and elevated NYHL want to see a major selloff. The month is up and when that happens the last few days typically finish down. Do not be surprised if the stock market retraces today's huge up move with a reverse move just as large or larger tomorrow. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Daily Chart; Overbot; Negative Divergence; Upper Band Violation; Price Extended



Stocks jump wildly higher on news that former Federal Reserve Chair Yellen, Queen of the Doves, will takeover as Treasury Secretary (Mnuchin's job); she will sign the US money. The Dow tags 30K. Indexes keep printing or teasing new record highs.

That choppy action with the slight upward bias you see the last couple weeks is the PFE vaccine rally, then the MRNA vaccine rally, then the AZN vaccine rally, and lastly, the Yellen Rally. Some of today's joyous 58 point pop in the SPX is attributed to the start of the transition of the presidency but the Yellen appointment is far more important. She will do everything in her power to try to push fiscal stimulus through while cheerleading Fed Chairman Powell to print money endlessly (monetary stimulus).

The red lines show the negative divergence now in play across all chart indicators as price made the higher high today. This is the top unless happy talk occurs to extend the fun again. Price also violated the upper band so the middle band, the 20-day MA, at 3497, is in play and lower band at 3259. Price is extended above the moving average ribbon requiring a mean reversion lower.

A neggie d smackdown is needed to put price back in its place. There was no reason for the SPX to come back up after the prior two highs this month; it was not due to technicals but instead due to vaccine and stimulus hype and perhaps an end to the King Donnie baby saga at the Whitehouse. 

Barring anymore happy talk, the daily chart is ready to receive a spankdown in this daily time frame (selling should begin and last several days). We shall see what the bears got. It is odd timing however, with the holiday. Typically, stocks are bullish into a holiday but the stock market is overdue to crack and the low put/calls and elevated NYHL want to see a major selloff. The month is up and when that happens the last few days typically finish down. Do not be surprised if the stock market retraces today's huge up move with a reverse move just as large or larger tomorrow. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 2-Hour Chart; Overbot; Negative Divergence



Stocks jump wildly higher on news that former Federal Reserve Chair Yellen, Queen of the Doves, will takeover as Treasury Secretary (Mnuchin's job); she will sign the US money. The Dow tags 30K. Indexes keep printing or teasing new record highs.

Left to right, those four blue squares are the PFE vaccine rally, then the MRNA vaccine rally, then the AZN vaccine rally, and lastly, the Yellen Rally. Some of today's joyous 58 point pop is attributed to the start of the transition of the presidency but the Yellen appointment is far more important. She will do everything in her power to try to push fiscal stimulus through while cheerleading Fed Chairman Powell to print money endlessly (monetary stimulus).

The red lines show the last three highs all spanked down by negative divergence, er, right now is the third high, the top is in. Price is printing successive matching or higher highs but the chart indicators are sloping downward, negatively diverging away from the rising price, thus, a neggie d smackdown is needed to put price back in its place. There was no reason for the SPX to come back up after the prior two highs; it was not due to technicals but instead due to vaccine and stimulus hype and perhaps an end to the King Donnie baby saga at the Whitehouse. 

Barring anymore happy talk, the 2-hour chart has reset and is ready to receive a spankdown in this 2-hour time frame. We shall see what the bears got. It is odd timing however, with the holiday. Typically, stocks are bullish into a holiday but the stock market is overdue to crack and the low put/calls and elevated NYHL want to see a major selloff. The month is up and when that happens the last few days typically finish down. Do not be surprised if the stock market retraces today's huge up move with a reverse move just as large or larger tomorrow. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500, VIX Volatility and USD US Dollar Daily Charts; Something is Rotten in the State of Denmark





Keystone has a simple mind so he must view things simply. Using a purple crayon, purple was always his favorite since it tasted better than the others, the big picture shows an interesting market juncture at hand. The three successive peaks on the SPX are higher highs. The euphoric bulls keep tripping over each other buying stocks at the ask, humorously, as they become sick and stricken with covid.

The VIX verifies the stock market happiness through August, however, as stocks pop joyously higher on vaccine euphoria and promises of unlimited monetary and fiscal stimulus sugar plums, volatility is not moving lower. Hmmm, something smells there, or as Billy would write, 'something is rotten in the state of Denmark'. The VIX should be sub 22 and perhaps sub 21. VIX trades now at 22.10 and has dipped sub 22 this morning but still does not take out the August lows, as it should to prove that more stock market joy is on the way.

Ditto the US dollar. USD, or DXY, dixie, is at 92.30 right now battling at the 92 support deciding to bounce or die. A weaker dollar pumps commodity stocks and small caps higher the Russell 2000 Index printing a new record high. However, as stocks continue traveling to the moon, and S&P futures are up +26 at this writing on news of Janet Yellen set for Treasury Secretary, the dollar is flat. Yellen is the Queen of the Doves so she will be pushing for boatloads of fiscal stimulus in her new job. She printed mountains of monetary stimulus at the Fed pumping stocks higher. The elite class, that own large stock portfolios, kneel at her altar each day, and are performing jigs of joy overnight.

The orange circles show key inflection points. The circles on the right-hand side for the VIX and USD charts should be lower than the middle circle but they are not. Thus, either the SPX is wrong and it must come back down now, or volatility and the dollar are wrong and the VIX will drop below 22 today and 21 and 20 tomorrow and the US dollar will fall through the key 92 support today both verifying the up move in stocks. Which do you think will happen?

Note how the stock market peaks occur directly to the dollar to the day. Thus, as the dollar goes, so goes the stock market in the opposite direction. Watch the dixie like a hawk especially that key 92.00 line in the sand. The VIX is turning before the stock market and actually giving a little heads-up that a trend change is afoot. This week the VIX would be called flat so keep an eye on it, a move substantially below 22 is going to send stocks higher while the VIX moving higher and taking out the 24 resistance would pave the way for the bears to create market carnage.

The bears have been patient the last couple weeks. The uber low put/calls and uber high NYHL verify the ongoing market euphoria and complacency so the comeuppance is at hand. It is a holiday-shortened week but these are historic stock market days ahead. If the republocrat and demopublican deep state prefer Sleepy Joey wouldn't they want to tank the stock market before he enters the job so his numbers will look excellent in the future? Equities may be bloodied beyond recognition by the time the 1/20/21 inauguration rolls around. USD prints 92.40. VIX 21.98. S&P futures +27. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 9:15 AM EST: Dollar pops like yesterday morning now up to 92.50. Euro 1.1854. S&P +27. VIX 22.13. The 92 support for the dollar is holding. Beads of sweat are forming on the dollar shorts foreheads as they begin looking around at each other wondering if anyone is going to flinch and jump ranks. Bingo. Dollar pops to 92.56 the HOD. Look, there's a dollar short that is covering deciding he does not want to play this game.

Note Added 8:20 PM EST: The dollar drops to 92.10. The VIX falls to 21.64 with a LOD at 20.80 which is a key number for the remainder of the week. The SPX catapults 58 points higher, +1.6%, to 3635 a new closing high. On the joyous high price print today, the SPX 2-hour, daily and weekly charts all negatively diverge across all chart indicators (signaling a top is about to occur). The bulls are trying to push the dollar sub 92 and the VIX sub 20.80 which would verify bullish glory ahead, otherwise, stock market disaster is at the doorstep. 

NYHL NYSE New Highs-New Lows and NYA NYSE Composite Weekly Charts; Stock Market Top At Hand




Typically when the sentiment swings too far in one direction, a recoil is needed back in the other direction. These inflections can be identified by extremes in the new highs and new lows as per the NYHL. When a rally is in full gear speeding higher, the new highs are far outnumbering the new lows and the NYHL prints higher numbers. After this euphoric blow-off top in buyer enthusiasm, the downside comes, just as the fun party results in an aching headache and queasy body the next morning; as Kris and Johnny sing Sunday Morning Coming Down.

Conversely, after blood and carnage on Wall Street, when the baby is thrown out with the bath water, a big rally will occur after the washout like the March bottom. The green circles show stock market bottoms and the red circles show stock market tops. What do you think will happen? It's going to be fun to watch. In a couple weeks, the bulls will be singing with Kris and Johnny opining about what was and asking what happened? This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Monday, November 23, 2020

SPX S&P 500 Monthly Chart; Megaphone (Expansion) Pattern; Overbot; Negative Divergence Determining When the Multi-Month and Multi-Year Stock Market Top Occurs



Keystone holds the megaphone to his mouth and exclaims, "Now here this, now here this, prepare yourself." The uber low put/call ratios continue signaling a substantive stock market top occurring now. The US dollar is teetering at the 92 level deciding to bounce or die. If the dollar dies below 92, stock will remains joyous into year-end. If the dollar pops higher, a potential March redux is on the table creating pandemonium into year-end.

The SPX monthly chart above is in its last throes. The red lines show negative divergence in play; the ole gal is running out of gas. The stock market is placing a multi-month and very likely multi-year top currently. The MACD line is all that matters right now and will tell you if the top is now, or, if the chart needs to breathe for another month or two to place the top and roll over.

The MACD line is poking higher (purple circle), long and strong, signaling that it still has fuel in its tank to take price higher which means a jog move is likely (down, back up). The other indicators are neggie d so a spankdown is in order in this monthly basis but the MACD tells you that price will come back up for another matching high after the selling occurs, on the monthly basis. At that time, when price makes the new matching or higher high, the MACD will go neggie d and the long-term top will be in, say during December or January. 

Here's the fun part. The long-term top may occur during the month-end price action (now). There are 4-1/2 trading days remaining in the month. US markets are closed on Thursday for Thanksgiving Day and Friday is a half-session. Next Monday is EOM, 11/30/20. If stocks flush lower now, which is a more likely outcome than stocks not flushing lower, watch that MACD line like a hawk. It will drop as selling occurs and since it is a monthly chart the final print is not cast in concrete until Monday one week hence. Therefore, if a big drop in equities occurs now, that MACD may come down just enough to get back below the prior highs in the MACD and turn neggie d as of next Monday. That would mean the long-term top is in now. As Bob always sings, it's all over now, baby blue. Don't fear the future; embrace it.

The megaphone, or expansion, pattern points to a dire outcome a couple years from now with the SPX eventually retracing to the 1800-2200 area. The long-term top is in either right now, which we will know next Monday, or, she will top out next month or January. Next Monday will tell the story. Expect many months and perhaps a couple-few years of pain ahead with a bear market. Plan accordingly.

The 10-month MA at 3156 is an early warning alarm that the stock market is in serious trouble and may collapse substantially. The 12-month MA at 3168 is Keystone's cliff-edge indicator where all hope is lost in the stock market. The 10 is usually above the 12 but the two are currently tracking each other, thus, take a red crayon and draw a thick line across 3156-3168 and that is the bigtime line in the sand where the stock market will have a high likelihood of crashing if price falls below.

The pending pullback expected now due to low put/calls should be anywhere from 50 to 300 SPX points over the next week or three, unless happy talk saves the day. Negative news, such as some problem with vaccines, would act as a catalyst to flush the market immediately lower. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

USD (DXY) US Dollar Index Weekly and Daily Charts; Sideways Channels; Oversold; Positive Divergence; Price Extended to Downside; Everybody and His Brother Says Dollar Down




The US dollar index, USD, or DXY, dixie, prints a 2-1/2 year low this morning (back to 2018 lows) at 92.15 now at 92.16, call it the 92 line in the sand. Everybody and his brother expects the dollar to drop like a rock. Keystone has been talking about a recovery in the dollar the last couple months and you see the first positive divergence pop that occurred as forecasted. Keystone is lonely sitting on the only deck chair on this side of the boat. Everyone else is on the dollar short side of the boat swigging down Fed wine and ECB champagne and partying all night long. Keystone is left with stale pretzels and a flat can of soda; no one wants to join his dollar long party.

The buck is bouncing around in that sideways purple channels shown on the charts so obviously the exit below, or breakout above, will tell the dollar story ahead. The massive pop in the dollar in March is what flushed the US stock market, and gold, lower. Get ready for a Mach redux. The stock market is likely topping-out right now as per its charts and technicals so the question is what potential catalyst will occur to create that mayhem. The vaccine news and ongoing fiscal and monetary stimulus chatter continues creating the sideways channels. The dollar does not know which way to break as yet considering all the market cross currents. The control of the US Senate will not even be known until 1/5/21.

Despite the universal Wall Street consensus that the dollar will drop, the charts above say the dollar will pop. On the weekly, price will seek the middle band, the 20-week MA, at 93.54, and falling, and then up to that moving average sideways cluster area at 95.65-96.79. That sure will surprise everyone. Timmy Trader said he took all his clients money and placed it on dollar short bets since it is the no-brainer trade of the century. Timmy is bragging about his dollar shorts to Emily, the pretty administrative assistant, but she blows him off and tells him the technicals do not line up.

The dollar daily chart is positively diverged as price comes down for another matching or lower low. This 92 area is tricky. Keystone's 80/20 Rule says 8's lead to 2's and 2's to 8's. Thus, a breach and close or two below 92 opens the door to 88. The charts are universally positively diverged so the only expectation is for a bounce higher in the dollar and this would overrule the 80/20 rule, at least for now. Price is extended below the moving average ribbon on the daily chart so a mean reversion higher is desperately needed.

The only thing that could halt the move higher in the dollar would be news (vaccine, stimulus, geopolitics, etc..) but the charts would likely only need a little time to reset and then be in the same position as now again. The Fed may proclaim that they can print money forever for the umpteenth time, the fans will go wild, and the dollar will drop. Barring any of the usual nonsense, the dollar should pop going forward and stay on guard for the March redux. Things may get very ugly to end the year. The interesting thing is that as the dollar jumps higher and stocks drop like rocks, people will not be seeking gold for protection since gold and silver will be dropping as well (or sideways). Lots of fun is about to begin. Are you ready?

Ho! Whoa! Ho!. The dollar weakness continues. DXY drops to 92.09. The dollar bears cheer congratulating each other on how smart they are holding suitcases full of dollar shorts. Beads of sweat form on the dollar bull's foreheads and they wonder if the charts may have led them down the Primrose Path. Will the massive Wall Street dollar short crowd be correct or will the charts and technicals above be correct and the bounce in the buck occurs (with an accompanying drop in stocks and gold)? What are you going to do? This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 6:20 AM EST: US dollar index 92.09. Euro 1.1902. S&P futures +22. VIX 23.39. Gold 1866. Silver 24.09. US 10-year yield 0.85%.

Note Added 6:22 AM EST: US dollar index 92.08 Euro 1.1899. The tension is so thick you can cut it with a knife.

Note Added 6:28 AM EST: US dollar index 92.06 with a LOD at 92.04. She's testing the critical 92 line in the sand support. The dollar has to bounce or die from here; it is time to decide. Euro 1.1899. 

Note Added 7:45 AM EST: US dollar index drops to LOD at 92.03. Bounce or die. Euro 1.1902. Gold 1866.61. Silver 24.20.

Note Added 8:35 AM EST: US dollar index drops to LOD at 92.02 and now prints 92.06. Bounce or die. Euro 1.1895. Euro down, dollar up and euro up, dollar down.

Note Added 9:55 AM EST: US dollar index rises to 92.17. Is it bouncing. Are we witnessing the bottom in the greenback occurring in real-time? Bounce or die. Euro 1.1885. SPX 3589. Gold 1856. Silver drops -3% to 23.80.

Note Added 10:01 AM EST: US dollar index rises to 92.22, no check that, 92.28. It's catching a bid perhaps a short-covering rally is on tap as shorts panic? Euro 1.186. SPX 3584. Gold 1852. Silver 23.77. VIX 22.88.

Note Added 10:03 AM EST: US dollar 92.33 shooting higher. Euro drops to 1.1847. SPX 3583.

Note Added 10:07 AM EST: USD 92.36. HOD is 92.40 so watch that resistance number closely. That's a big move from 92.02 a little while ago, isn't it? Do you think the charts above are correct calling for a dollar bounce or is Wall Street analysts correct now doubling down on their dollar shorts? So far, the greenback bounces from the key 92 support level and line in the sand. Euro drops to 1.1842. SPX slips to 3577 off the initial 3590 high after the opening bell.

Note Added 10:10 AM EST: USD 92.45. Euro drops to 1.1829. SPX slips to 3576.

Note Added 10:53 AM EST: USD 92.57. It's a moon shot. Euro drops to 1.1818. SPX slips to 3571.

Note Added Tuesday Morning, 11//24/20, at 6:45 AM EST: USD 92.30. Euro 1.1879. SPX slips to 3578. S&P futures re up+29 on the happy news that Janet Yellen, Queen of the Doves, will head the Treasury. VIX 22.03. The dollar continues the battle at the 92 support.

BPSPX S&P 500 Bullish Percent Index Daily Chart



The Keystone Speculator's BPSPX Indicator issues a stock market sell signal a couple days ago. The two key parameters for the BPSPX are the six percentage-point reversals and the 70% crosses. The BPSPX bottomed as November began at 45. Adding 6 is 51 where a market buy signal would occur, and it does occur. Price then runs higher as the stock market rallies and bingo, a gap up through the 70% level occurs creating a double-whammy buy signal.

The BPSPX tops-out at 81 so taking away 6 is 75 where a stock market sell signal would occur, and it occurs. Equities are expected to be soft and soggy going forward. The next couple days will tell the story. If the BPSPX drops below 70, that is a double-whammy sell signal and stocks will be falling like rocks. The bulls need the BPSPX to move higher above 79.60 (73.60+6) to regain control, which is a tall order.

When the BPSPX drops below 70, the bears will be throwing confetti while the bulls will be running for their lives. S&P futures are up +25 with the VIX at the 23.32 palindrome. Futures are pumped higher on AstraZeneca vaccine news. AZN actually trades down -1.1%. The three vaccine happy talk releases occur three Monday's in a row. That is not by chance. It gooses the stock market as much as possible instead of all the news hitting on one day. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Saturday, November 21, 2020

CPCE Put/Call Ratio Daily Chart; Significant Stock Market Top At Hand



The stock market is about to have a religious experience. The CPCE put/call ratio prints a multi-year record low on 11/10/20 so the top watch in the stock market continues ever since. Typically, after such a low reading, the stock market will top out anytime over the coming days sometimes up to a couple weeks and it has been 8 trading days now so stocks should buckle at any time. The red circles show stock market tops and the green circle is the key March bottom at the peak of fear and panic. What do you think will happen?

The CPCE is at 0.40. A 0.4-handle is uber low but a 0.3-handle printed at the lows days ago. Everybody and his brother are long the stock market. The uber complacency and fearlessness identifies a stock market top. Traders and investors are betting their kid's education money on the quintuple long 5X tech ETF; QQQQQ. Fred Flamer has all his clients 100% long AMZN and AAPL stock. He says its a no-brainer although he has decided to diversify and will buy TSLA stock with all the new money flooding into the fund. Everyone is afraid they are missing the vaccine train leaving the station. It's the silly, giddy season.

The vaccine news means an end to the pandemic by summertime. Mask-less ladies will be frolicking at the beaches in colorful bikinis displaying glossy lips and welcoming smiles for mask-less men. This isn't going to happen. Americans are an optimistic bunch but by Valentine's Day they will be wallowing in pity and misery asking, "why?!" The coronavirus data is ramping higher out of control. Reference Keystone's articles in the coronavirus series. Article #25 was published last Sunday with an ongoing daily chronology added since and Article #26 is slated for publication on Wednesday, 11/25/20, Thanksgiving Eve.

Americans are not ready for the sh*tstorm coming their way. Citizens no longer listen to the never-ending confusing messages on television; wear  a mask, don't wear a mask, masks help others not you, now they help you, do this, don't do that, can't you read the sign? The vaccines are not going to be the magic wand that makes the virus disappear by July 4th.

In September, only 50% of Americans were willing to take the vaccine, now it is not that much better at 58%. The US will need about 60% to 80%, or more, for herd immunity so it is going to be an uphill battle if everything goes right. Say there is about 10% who have contracted covid whether they know it or not and add that to a 40% or 50% vaccine participation barely gets you to herd immunity. That is why Fauci, Birx and other say you may be wearing masks through next year.

The virus immunity does not kick in until about a month or so after the initial shot; there are two shots about 3 weeks apart. Pfizer and Moderna are not telling folks that it would take them three years to make enough doses to vaccinate everyone in the world. Of course the wealthy elite class will receive the vaccine first if they choose to take it. For the US, there may be enough doses to achieve herd immunity by summertime so the virus will be in everyone's lives a long time. This negative talk is far removed from the happy vaccine party over the last couple weeks, isn't it?

On top of all that sobering vaccine reality, is the new mRNA technology angst, so the CDC, Whitehouse and medical professionals need to get out in front with the proper messaging about the messaging RNA, otherwise, social media is going to mow them over. There is concern the vaccines may alter the DNA in a human body. Currently, in animal studies, this is not the case, however, if the authorities do not get out in front of this immediately, now, and educate the public in an offensive position, the rumors and conspiracy theories will begin labeling the vaccines that way and any hopes of a vaccine program will go down in flames. Nobody wants their DNA modified. Americans may not be thrilled about other tracers, animal proteins and/or preservatives such as mercury in the vaccines. If the public is not informed now before the vaccine misinformation begins, especially in relation to DNA modification, the vaccines have no hope and next year America will look like The Grapes of Wrath with tumbleweeds floating by the front door that sits off its hinges creaking in the dusty wind.

Not only are the uber low CPCE and CPC put/call ratios signaling a significant top so are other important metrics like the NDXA150R and SPXA150R. The SPX monthly chart is topping out with negative divergence which means a historic multi-month and perhaps (likely) multi-year bear market is about to begin. The AAII Investor Sentiment readings show bullishness at a 3-year high. The euphoria is off the charts and the beautiful part about it is that everyone is touting how bearish everyone else is. This behavior verifies the top even more; no one is skeptical that we are at a major top and that is when the tops occur.

The multi-month low put/call readings are historic. If you are new to trading, you are seeing stuff that is rare. These are epic times that business and economic students will be talking about for decades to come. If you did not trim long positions last week and bring on shorts, shame on you. Who knows, markets may crash on Monday. A flash crash is on the table going forward and it will be one that goes down but does not come back up. It's going to be fun. Blood and carnage coming soon to Wall Street. The selling will begin any minute, any hour any day ahead. The week ahead is Thanksgiving so markets are closed on Thursday and only a half day on Friday which is typically a bullish day. With lower volumes, things may get dicey quick.

Congress and Mnuchin are trying for another fiscal stimulus deal so hype around that will try to keep the stock market elevated. Ditto the vaccine talk but you know what is coming there as explained above. This is epic stuff, folks. Get out of the stock market if long and do not look back. Since it took an extended period of time for the top to finally appear (the multi-month lows in the put/calls are unprecedented), the selloff may be quite extensive into and through year end; just have to see how it goes and see how the charts develop. Let that dough sit in cash for a few months and simply watch what happens. Get ready to see some wild stock market action. When the VIX spikes higher as stocks drop the intraday and day to day price moves in the stock market will be huge. A tradeable bottom will not occur until the CPCE moves above 0.80 so that is when you can nibble on longs for tactical trades. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.