CPC Put/Call Daily Chart Moving Towards Complacency
The CPC put/call daily chart shows complacency in the markets. As the CPC drifts lower, now at 0.84, it shows that traders are not fearful of the markets. The markets are not climbing a wall of worry, quite the opposite. Traders are fully expecting Bernanke to perform easing measures on 7/31/12 and 8/1/12 and also in conjunction with Jackson Hole, a la QE2 in August 2010, as well as acting at the September Fed meeting. Traders feel this is a done deal so they have no fear and are maintaining a bid under the market. We watched the sub 0.8 numbers call the market top this spring, then we saw the readings above 1.2 signal time for a market rally. When traders are fearless and complacent, which is backed up by the low VIX as well, the markets are near a top. 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.
Much resembles a top is near I'm anxious to see the next few weeks of action it will be hard to put shorts on but a nescassary part of a good business plan.... Where are we going to find the next 30% move?
ReplyDeleteMCAP, Bernanke will not announce serious QE3 action until the CRB dropsunder 270 so he has breathing room.
ReplyDeleteTraders are expecting some easing for the next Fed meeting in two weeks, to set things up for possible Jackson Hole announcement or mid-Sept announcement.
but in near term, traders appear content to stay bullish and try to wait out the two weeks until 8/1. That will probably prove too long and markets may want to trail lower before then. It will be interesting to see if price stays inside the megaphone pattern.
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