Thursday, January 2, 2014

CPCE Put/Call Ratio Weekly Chart Signals Significant Market Top

Harry, pass that baseball bat this way so Keystone can beat this dead horse a bit longer. You all know the drill by now. We have been focused on the low CPC and CPCE put/all ratio's for the last 7 weeks or so that are firmly verifying the rampant complacency and trader fearlessness in markets. Economist Nouriel Roubini, typically known for his bearishness, is broadcasting bullish times ahead for global markets and the US stock market. Even the perma-bears have now capitulated. There are no bears remaining; bulls are selling stocks to other bulls and then buying the stock back. The music plays on.

By now, all long positions should be exited that you are not willing to hold for a few years. This is a broad brush approach aimed at helping novice traders since the professionals will obviously employ other more complicated strategies in the options and other markets. Short or in cash is the place to be right now. There are a few exceptions. Gold miners look good going forward and coffee should outperform as a commodity this year so these are acceptable long plays. Just about any gold miner as well as the ETF's should be fine going forward. For coffee, do not play SBUX, DNKN and this type of thing. CAFE and JO would be the only two attractive long plays for coffee in 2014.

The red circles show the significant market tops. Green circles are significant market bottoms. What do you think will happen? Note that the SPX placed a key bottom at 1080 in late 2011. Since then, the obscene central banker money printing pumps markets vertically higher, from SPX 1080 to 1850, 770 handles, +71%, in only 2 years time. Send this post to Chairman Bernanke and future Chair Yellen since they say a +71% jump in asset prices in a couple years does not constitute a bubble. To them, this is regular market behavior. The Fed has greatly destroyed price discovery and the low put/call says the time of reckoning is approaching very quickly. Equities are at a significant market top currently. Watch your wallet. Markets are expected to sell off at any time moving forward and the current highs may remain in place for months if not years. Keystone is finishing the 2014 predictions and thinking that THE top occurs either now, in January, or perhaps May, after a market drop and recovery may occur. More information to follow. 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.

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