Thursday, March 12, 2015

CPCE CBOE Options Put/Call Ratio Daily Chart

The CPC put/call ratio spiked slightly the other day but has since retreated and the CPCE put/call above shows an uninspired move higher. This confirms the ongoing complacency in the stock market despite the large Friday and Tuesday selloffs as well as yesterday's weakness. Traders could not care less about the pull back in stocks the last few days and are simply planning where to enter long expecting new all-time highs ahead. Traders are complacent completely lacking any fear in markets since the central bankers are printing money like madmen continuing to pump global stock markets higher. The mantra was always "don't fight the Fed" and now is "don't fight the ECB." There is no reason to worry since the central banks will support the stock market forever. As Alfred E. Neuman says, "What? Me Worry?"

The green circles show recent bottoms in the stock market due to a tinge of fear and panic while the red circles show market tops due to complacency. The double circles show the significant tops and bottoms. Remember at the end of February Keystone pointed out the complacency calling a near-term top in stocks which occurred. The put/call remains in no mans land nowhere near the levels that identify fear and panic above 0.80. Note the October stock market bottom was created above 0.90 with the highest level of worry among traders in many months. The expectation is, despite any short term machinations, that stocks will maintain weakness and selling pressure will continue until traders become worried and develop fear at 0.80 and higher, at least at 0.75 and higher. 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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