Monday, May 16, 2016
CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts
The sideways choppy behavior continues for the stock market chewing up bulls and bears alike. The low put/calls (red circles) at the end of April identified the market top, which occurred, and then some selling action takes place into the near-term bottom about one week ago with the elevated put/calls. Markets move choppy sideways and then rally big today.
Note, however, that traders went from fear and panic back to complacency in a heartbeat. Today's trading took on a party atmosphere. Goldman Sachs pumped the oil markets higher, perhaps to help their own positions, which created a rally in energy stocks and the broad indexes. Warren Buffett is buying tech stocks like Apple so the party was in full swing. Strong semiconductors helped the party continue.
Over the coming days the complacency will be at the point where it identifies a stock market near-term top again and stocks will retreat. The put/calls are already low enough to create s snap back move tomorrow to the downside for equities but there is likely a couple-three days of sideways choppy slop ahead. The put/calls tell you that the stock market is probably not worth trading form the long side; stocks can definitely run higher but price will be running into a near-term top due to the low put/calls. 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.