Tuesday, September 15, 2015

CPCE Put/Call Ratio Daily Chart Signals Near-Term Bottom at Hand

The CPCE jumps to 0.91 indicating ongoing worry by traders which is indicative of a near term market bottom at hand. The spike to 1.05 created the market recovery bounce after the waterfall drop in stocks. Stocks are choppy sideways in recent days but every time the CPC is at these levels a near term bottom is at hand. S&P futures are flat about 90 minutes before the opening bell. Stocks would be expected to rally until the CPCE drops to sub 0.70 towards the red circle.

The new moon weakness and drop in copper created downside action in equities yesterday. During OpEx week this week with Quadruple Witching on Friday, stocks are typically bullish from a Tuesday low into a Wednesday high. So there will likely be dip-buyers entering the market today as professional traders may play this buoyancy that occurs during OpEx week each month. 
Stocks also tend to be buoyant moving into a FOMC meeting which is Wednesday and of course Thursday at 2 PM EST the important rate decision occurs that will move global markets.

Keybot the Quant remains short through all the choppy whipsaw action in recent days. The algorithm says copper is the key parameter effecting market direction currently. Watch JJC 28.43. JJC is at 28.25 which creates stock market weakness so a move above JJC 28.43 verifies that the bulls have the beans to create a recovery rally. Copper is trading flat currently. Bulls will confirm a strong upside rally if RTH moves above 76.10 and/or UTIL above 563.

You can use these three parameters to gauge market strength. If JJC remains under 28.43, the bulls got nothing and the stock market remains weak. If JJC moves above 28.43, the bulls have upside juice and equities float higher. If either RTH or UTIL turn bullish the upside has legs. 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.

Note Added 9:25 PM: The big rally begins today with the SPX bouncing 25 points, +1.3%, to 1978. Intraday the SPX was up 30 points. As mentioned above, the rally should continue in stocks until the put/call ratios move lower.

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