CPC Put/Call Ratio Daily Chart Complacency Rules

The markets are not climbing a wall of worry, traders are not worried at all, expecting for markets to simply remain buoyant from here thru the end of the year.  As the CPC falls lower towards 0.80 and lower, this indicates that traders are very complacent and worry-free. This behavior helped identify the market top in February-April. Once the CPC moves above 1.20 and fear is rampant, that is where substantial market rallies begin, from 1.20 and higher.

Thus, stay on your toes moving forward, traders are much too relaxed about the equity markets. This is likely a result of Chairman Bernanke, as well as other nations, easing measures and traders fully expect additional easing by the Fed over the coming days and weeks, thus, no fear or worry, Ben will pat their behinds.  Perhaps Bernanke will practice some tough love and not provide the spoiled child (markets) what they want (more Fed easing).

Watch the VIX in conjunction with the CPC since it is a sister fear gauge. The VIX jumped over 20 yesterday but then fell back under 19.  Projection is that market selling should occur causing the CPC and VIX to move higher from current levels. If markets move higher instead, that simply will increase the complacency positioning the markets for a larger pull back as time moves along. 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.