Saturday, December 27, 2014

CPC Put/Call Ratio Daily Chart Signals Significant Market Top

The CPC put/call ratio chart has been highlighted two prior times in the last few days and this drama continues. Friday may have been the last best time to exit any longs.The CPC drops to 0.73 the third low print in the last six days. A market top is so close you can smell it. Interestingly, however, the stock market is in the Santa Claus rally right now into the first two days of the new year which is through Monday, 1/5/15. The red circles identify the market tops over recent months and the red boxes show the significant market topping periods. Green circles show the market bottoms and the green boxes are the significant market bottoms.

The bullish euphoria is rampant as evidenced on Friday with traders buying any stock with a heatbeat while wearing lampshades on their heads and staggering around drinking Fed wine. Fund inflows into stocks are at levels not seen since the dotcom bubble in early 2000 and also in 2008 prior to that market event. Investors are chasing dividend stocks each congratulating each other that they will be safe after any market pull back plus enjoy a divvy. As Keystone's friends in Brooklyn say, "Good luck wit dat." Others are taking their Christmas money and also cashing in gifts then running to their broker to buy as much AAPL as possible. Pundits parade across television and computer screens one more bullish than the next with several SPX targets for next year above 2300.

The CPC verifies the rampant complacency so a top is in at any time. Since there are two other low prints in the 0.7's the top should be here sooner rather than later (maybe last Friday, or Monday or early next week rather than days later into the middle or late next week period or early during the first full week of trading in January; but the top is here. It will not be surprising to see the markets sell off despite the expected Santa Claus rally. The central bankers are colluding this weekend to stop any market down turn with Japan approving a $29 billion stimulus package that will pump stock markets. The central bankers are the market.

Look at any market bounce as a gift. If there are any longs you are not willing to hold for a few years time, now is the time to throw them out the window. The expectation is for a market pull back to occur now with the SPX dropping to test the 2068 support (December began at 2067.56) then the important 2040 support. 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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