Sunday, July 10, 2016

CPCE Put/Call Ratio and SPX (S&P 500) Daily Charts Signal Near-Term Market Top At Hand

The VIX collapses to 13.40 and the put/call ratios also tumble lower indicating rampant complacency in markets. The central bankers are colluding to provide more stimulus so not one is worried about the stock market selling off. After the Brexit vote, the BOE swoops in to save the day promising more stimulus in August and also reducing the rules on banks to encourage lending. Other global central bankers plan to keep pumping markets as well. So every day is a party and there is no reason to worry. The low put/call, however, says when no one is worried that is time to worry.

The red circles show significant market tops over the last year which occur when the bullish euphoria becomes too excessive. What do you think will happen? Yes, stocks will likely top out in the days ahead, probably this week, and the only question is how far down they will move once they do sell off. If stocks print new highs early in the week it will be interesting to see if a thrust higher occurs before the complacency knocks it all lower. The banks report earnings this week so a potential market top may occur mid to late week due to the financials. 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 on Monday Morning, 7/11/16, at 10:43 AM EST. The SPX prints a new all-time record high at 2139.34.

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