Tuesday, February 4, 2014

CPC Put/Call Ratio Daily Chart Continues to Signal Ongoing Complacency and Lack of Fear

The put/call ratios have been highlighted extensively on the blog over the last couple months. The uber low numbers signaled a significant market top at hand and fortunately, all the loyal readership is fine since you already threw any long overboard that you are not willing to hold for a few years. Those that fought the put/call signal are now -10% lower. Your long shopping list should be ready to go, however, you may want to push that list aside and have an extra cup of coffee or tea instead.

The CPC prints a remarkable 0.80. After the stock market bludgeoning yesterday and the Nasdaq losing triple digits, the general sentiment remains relaxed and complacent. Most traders are simply deciding what level to reenter the markets and expect new highs in the future again. Typically, with such a dire negative day, the CPC should be at least above 1.00 if not above 1.10 and higher. The market bears salivate at such action since the majority of traders believe that the selloff is nothing to worry about. Typically, this behavior indicates there is much more market downside ahead until the panic and fear appears above 1.20.

Keep the long shopping list handy. Continue to research companies and fine tune your desired long play ideas. Wait until the CPC runs to 1.20 and higher before scaling in on the long side especially if you prefer to play the intermediate, multi-week and multi-month, time frame. 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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