Monday, December 23, 2013

CPCE Put/Call Ratio Weekly Chart Signals Significant Market Top

You know the drill. Keystone has posted this chart, and the CPC put/call, both weekly and daily charts, over the last 7 weeks. Nothing has changed. It is surprising the markets have not placed the top as yet. The SPX is up 50 or 60 handles from where the low October print in the CPCE occurs, a multi-year low print. The multi-year uber low put/call signals a significant market top is at hand. By now, you should be out of all longs that you are not willing to hold for a few years. Cash is a great place to be currently. You do not want to nibble on the long side until the CPCE moves above 0.80. The near 5-year rally is long in the tooth. The bullishness is very enthusiastic, as evidenced by the low put/call and VIX, with folks in a holiday mood. No one expects any market downside since the Fed is going to keep low rates forever. QE Infinity is replaced by ZIRP (Zero Interest Rate Policy) Forever.

Keystone has no problem preaching market negativity moving forward. Everyone is committed to the bull side now and do not realize the serious market downside on tap ahead. The market bottoms recently (green circles) are cheesy and weak. The dip-buyers continue to rush into the market due to the bullish optimism. Markets continue climbing a wall of Fed. Continue preparing your shopping list, only own long stocks you are willing to hold for many years forward, stay in cash, and wait until the panic and fear develops in the weeks ahead to put the money to work on the long side. The short side can be played nearly across the board from here forward. Considering the uber bullishness and buoyancy in equities, a major negative geopolitical event may occur as the catalyst to create the move lower for markets. 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.

Note Added 12:41 PM: The SPX prints another new all-time high so far today at 1830-ish. Watch your wallet.

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