Sunday, November 17, 2013

CPCE Put/Call Ratio Weekly Chart Signals Significant Market Top

Keystone continues to highlight the put/call ratio's for the last month during this intense and historic market action that is unfolding. The red circles indicate significant market tops while the green circles indicate the significant bottoms. The uber low multi-year low CPCE print occurs exactly one month ago. Typically, markets will top out within 2 weeks time of such a significant event and the market move lower will be substantive. We are now at 4 weeks time beyond the low print. Note that a low 0.51-ish days ago keeps the drama and theatrics alive. Despite the upside market orgy last week with the SPX now a hair away from printing 1800 for the first time in history, markets are at a significant top, perhaps similar to the dot-com bubble top in early 2000 and the October 2007 market top. The current highs may not be seen for years. The low CPCE signals a significant market top at hand which should print the top for equities any day forward.

However, all the dire prognostications take on a hollow ring since the bulls celebrate a continual Caligula-style upside orgy day after day, drinking Fed wine, main-lining the weaker yen from the BOJ, and pumping U.S. and Japan equity markets higher, as high as a kite. The market action is remarkable and epic; no one appears to be as impressed from this perspective (that a perhaps long-term significant top is currently printing). The majority of traders say that equities will now move higher non-stop until March since that is the earliest that QE Queen Yellen will begin tapering the obscene money-printing. And this perspective is firmly reflected by the complacent put/calls, low VIX and high bullish sentiment in the Investors Intelligence Survey. It is party time in markets and everyone is happy to be long with zero fear or worry. Of course, this is when the slap occurs.

Note the downward channel on the chart. The uber complacency is not simply a localized time event. The put/calls have been leaking lower for a couple years showing that most every trader has now capitulated to the Fed and kneel in unison in front of Yellen, crawling a few feet to the left after kissing Chairman Bernanke's shoes for the last few years. There's a new easy money crack supplier in town. The long downtrend further bolsters the seriousness of the current market top. The key this week is the BOJ. If they weaken the yen creating more upside for the dollar/yen, U.S. stock market and Nikkei, the CPCE can very well come down for another 0.5-ish print or lower. This simply further locks in the market top. Projection is that a significant market top is at hand. It is amazing to see the markets not turn down within the last month. Perhaps this week will be a significant market week in the history of the stock market. 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.

No comments:

Post a Comment

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