Sunday, December 21, 2014

CPC CBOE Put/Call Ratio Daily Chart

The near-term stock market tops are easy enough to identify (red circles) as rampant complacency and lack of fear continues in the stock market. As the famous Alfred E. Neuman says, "What? Me Worry?" The central bankers control the markets so after Fed Chair Yellen provides more dovish remarks with the first rate hike not on tap until summer 2015 and later, long traders jump on the bullish side again raping the upside for all its worth. Why not? The Fed hands obscene stock market gains to those that own stocks. The wealthy become wealthier. Let the disadvantaged eat cake. It's there own fault for not having the money to own stocks. This is the new, present-day modern America.

When the CPC prints in the 0.7's and lower, the complacency is out of hand, traders are buying any stock with a heartbeat and not even bothering to look at fundamentals or technicals. There is no reason to consider such old school approaches to buying stocks since the Fed is goosing the stock market higher to enrich the elite class as well as set up their own retirement plan. Former Fed Chair Bernanke receives $250K for a token lunch engagement these days and Yellen is all to eager to do the bidding of the banks since she too will be rewarded with a luxurious retirement package for supporting the wealthy class with her policies.

When the CPC prints above 1.20, a whiff of fear and panic begins to enter markets and that is the time to begin nibbling on long positions since a bottom is near for stocks. The 1.20+ level was barely violated as Yellen goosed the markets last Wednesday. Note how the stock market tops (red circles) honor the 0.7's guideline but the market bottoms do not firmly honor the 1.20+ guideline. This behavior verifies how the Federal Reserve creates the stock market bottoms and recovery moves especially when they fear the markets are ready to tumble down the rabbit hole. Also of interest, note the move on Thursday, in a few hours time, traders went from a tinge of fear developing (above 1.20) to immediately turning fearless and complacent (in the 0.7's) in a heartbeat. All Hail the central bankers! Long traders kneel in front of a statue of Yellen each morning praising the female Keynesian God.

The ECB chimed in (global central bankers are colluding to provide coordinated stimulus to pump stock markets higher) promising more stimulus further goosing the stock market higher. The Fed provides more easy money heroin by relaxing the rules and regulations against banks to further boost stocks last Friday. These rules were required to help guard against another 2008-2009 financial crisis but no one cares anymore; the greed is rampant on Wall Street. The Fed goosing is blatant and sowing the seeds for a sad America ahead.

Bullish traders are spiking the eggnog dancing with lampshades on their heads expecting the happy December seasonality and Fed support to carry through into 2015. There is no reason for fear or worry. The elite class that own stocks are carrying Yellen on their shoulders along the halls of the Eccles Building celebrating a season of stock market joy. However, what does the chart tell you about the direction ahead? 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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