CPC CBOE Put/Call Ratio Daily Chart; Near-Term Stock Market Top At Hand

The stock market rallies on the the happy US-China trade talk and central banker dovishness this year. Traders are drunk as skunks on Fed wine, PBOC baijiu, ECB champagne and BOJ sake, donning lampshades on their heads, dancing on tabletops, and buying stocks at the ask with reckless abandon.

Uber driver Jayesh took his entire life savings and placed it in the stock market saying he was afraid that the train was leaving the station without him. Aunt Gloria,trying to find ways to stretch her fixed income, gave her entire life savings to Mr Snardley, the local broker in town, he has an office next to the doughnut shop, telling him to buy the stock market, especially tech stocks, like the pundits said on television. 2019 starts with five consecutive up weeks for the Dow Jones Industrials (INDU; DJI). The wine is flowing like water.

The CPC put/call above shows that the bullish euphoria and complacency is off the charts. Everyone is convinced that there is nothing but blue skies and rainbows ahead. Cats and dogs are living together. There is no fear that stocks can go down again. Investors say the carnage is over, the coast is clear, and all is fine. The bulls are buying stocks without any worry or fear. This complacency and fearless behavior sends the CPC lower.

Ditch any long positions and bring on shorts. The stock market will top this week and likely drop 40 to 150 SPX handles. January was all up. Usually when a month moves nearly the whole time in one direction, the last couple-few days it will reverse to end the month. There are only four days remaining in January Monday through Thursday so this seasonality-type factor hints at a whiff of bearishness in the week ahead which jives with the uber low put/calls. Looking at the charts above, what do you think will happen? 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.