Wednesday, September 4, 2013

CPC and CPCE Put/Call Ratio Daily Charts Signal Market Top

The complacency saga continues. Keystone continues to highlight hte CPC and CPCE put/calls since they show what traders are actually doing, not what they say they are doing on television appearances.  No matter who waxes worry on the air waves, the bulls continue to buy the market believing in the Fed and other central bankers. The crack cocaine easy money has been supplied for years now, so the junkie traders are hooked and only see markets through these rose-colored glasses now. The charts show complacency in charge. Trading volume is at 15-year lows which opens the possibility that the exit door may be quite small for the herd unraveling positions.

The put/calls indicate that a significant market top is in place, contrary to the significant bottom in June. Stocks are not attractive on the long side until the CPC moves above 1.2 and the CPCE moves above 0.76. Until then, keep refining the long shopping list deciding which stocks you would like to own, study their fundamentals and charts so you can make steady confident decisions on going long when the time comes. When the put/calls shoot skyward, the panic and fear will create a worrisome market, so if you are ready with long selections and did your homework, you will be strolling through the fire and carnage whistling a happy tune as you scoop up bargains for the long side. Bears are favored moving forward until traders display fear and panic like mid-June. 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.


  1. Why is the market surging even with such low CPC values?


    1. That would be expected Iron man. The low complacency numbers represent market bullishness. As the markets sell off the put/calls will move higher. Also think of these charts in relation to time frame. The put/calls did a great job highlighting the May top, June bottom, early August top, so this is over a multi-week time frame perhaps a month or two, so short-term venturing into the intermediate term. So markets may move up and down 20, 30 even 40 SPX points in the VST, days and weeks, but overall, the charts above say, that over time, over the next weeks perhaps a month, or two, or three, the put/calls are going to end up in the panic zone. So markets can rally some more, and put/calls can drop some more, but the end result will be an eventual move to the panic side which corresponds with lower equity markets.

  2. Got it. Thanks so much for all the education and input.



Note: Only a member of this blog may post a comment.