Reference the prior CPC chart that forecasted a near-term market bottom due to elevated fear and panic above 1.20. The bottom occurs yesterday with a robust rally. Interestingly, during the rally traders quickly become complacent and return to a complete lack of fear that stocks will ever sell off again. Thus, at 0.56, the CPC signals that a near-term market top is at hand. The CPCE put/call ratio did not drop as dramatically as the CPC but does retreat to 0.66.
A couple days may be required for the CPCE to drop lower into the 0.55-ish area to signal a near-term top in stocks. The CPC above says a market top can occur any day forward but the top may occur, say, in the back half of this week or early next week (when CPCE comes down more). S&P futures are down -10 ahead of Tuesday trading two hours away.
Retail Sales and retail earnings are on tap in the back half of this week which may impact the stock market. In these sick central banker-controlled markets, retail data may actually show improvement and the good news may be perceived as bad news for stocks since a rate hike would be on the table sooner rather than later. It is obscene what the Federal Reserve and other global central bankers have done to the world's economies and markets with their twisted Keynesian theology. Markets were never allowed to correct properly in 2009 and have been artificially pumped higher for the last six years by printing money creating new bubbles in nearly all asset classes.
China devalues the yuan overnight further fueling the global currency wars; the race to the bottom; the race to debase. Countries devalue their currency so their export and manufacturing industries can flourish and help the economy recover. ECB President Draghi implements his quantitative easing program with the goal of sending the euro lower to boost European exports. All countries are in the game now slitting each other's throats. The Keynesian QE programs can only work if one or two countries are devaluing their currency (such as the Fed starting QE in 2009) but is not effective once everyone is in the game like now. 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.