Friday, September 20, 2013

CPC Put/Call Ratio Daily Chart Signals Market Top

We have watched the CPC and CPCE put/call ratio charts over the last 9 trading days, ever since the uber low print at CPC 0.65 days ago. The red circles show the wine flowing like water, long traders are drunk on the Fed's wine, staggering around, and buying stocks on the long side each day without a care in the world. Once a low print occurs, the markets typically experience a significant top, that is important for at least a month or two forward. The price move sub 0.80 triggers the signal that a market top is imminent in the days ahead. Traders are far too complacent now and with the Fed pump the other day, the giddiness has only increased. The shoe shine boy and taxi cab driver told Keystone to buy the markets with both hands yesterday.

The green circles show the market bottoms occurring as fear and panic appears in traders' eyes. Use the 1.20+ level and higher as a signal to bring on longs since it will be a nice safe entry point. With the CPC in the cellar now, it is not the time to buy the market long, but instead, continue developing your long shopping list. That way, you will be ready to buy the market long when the CPC moves above 1.20. The purple dots show the price extensions where a reversion to the mean will be required. Right now, price is under the 20 MA under the 50 under the 200. Protection for a downside move in markets must be in place either using puts or simply selling off longs or using other short strategies. There is likely not much time remaining.

When an uber low print occurs, the markets typically drop within 1 to 10 trading days, and today is about the tenth day that the uber low CPC's remain but equities remain elevated. Note how for many months the markets sit on the bull side and show no respect to the bear side at all. A reversion to the mean will occur and more action at +1 CPC's are likely moving forward. Hold on to your hat since the next few market days may be quite dramatic. A market top and sell off is expected moving forward. 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. Keystone-

    Is the CPC chart on stock charts continually updated? Is it a real time chart?


    1. It's an end-of-day print (note the 'EOD' notation in the tag line on the chart). For the way the CPC and CPCE put/call tools are used as highlighted above, it is not necessary to watch it intraday. TRIN and TICK are vital to watch on the minute charts but not put/call ratio's. Simply check them each evening.

    2. Got it. Thanks.



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