Sunday, October 20, 2013
CPC and CPCE Put/Call Ratio's Daily Charts Signal Significant Market Top
The complacency and trader fearlessness is off the charts again. The Washington clowns averted a debt crisis, at least for a couple more months, Fed's Fisher, a noted hawk, flaps dove wings saying QE will continue and Fed's Evans says the lack of data due to the shutdown likely takes QE tapering off the table at the FOMC meeting in less than 2 weeks. Therefore, traders don toga's and par-tay, drinking the Fed booze and buying stocks long, looking forward to more Caligula-style upside orgy moves in stock prices. Complacency and fearlessness always identifies a market top, just like September's top. Thus, those that are jumping on the band wagon long will regret it. The preferred action is taking profits on longs, increasing the cash position and taking on significant downside protection.
Now that the CPC and CPCE are printing uber lows, the market top should occur anytime over the coming days, say within zero to 10 trading days. Playing the long side now is like picking up nickels in front of a bulldozer. Since the bears continue to be short-changed this year, a reversion is desperately needed, thus, this market sell-off may become quite substantive, say form 80 to 150 SPX handles, maybe a significant amount more with the SPX revisiting the 1500's. Watch your wallet. 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.