CPC Put/Call Ratio Daily Chart

The uber low put/call ratios finally show some signs of life. The CPC pops to 1.03 and the CPCE jumps to 0.69. It's a start. The low put/calls, and low volatility, verifies ongoing market complacency. There are still many traders anxiously buying the dips. Some investment houses are jumping-in to the long side because they missed the move up from January. They are trying to play catch-up but may end up getting cut off at the knees.

As the put/call ratios move higher, that represents increasing fear. You always want to buy when there is blood in the streets as everyone swears they will never own a stock again as long as they live. Tradeable stock market bottoms occur when the CPC moves above 1.20-ish and the CPCE above 0.80-ish. So you can start to watch these charts to see if panic and fear will appear, if so, you can nibble on long plays (above the green line).

The expectation from the uber low put/calls and the ongoing complacency would be for further downside in the stock market. That is the only way to create panic and fear. When people lose money watching stock prices tumble lower, they become fearful and will panic especially if the SPX falls far enough.

The S&P 500 is at 2805. Serious market trouble will start if the SPX loses the 200 EMA on the SPX 60-minute chart at 2785. The stock market could drop into free fall if the SPX 12-month MA is lost at 2748. Stock market bulls are fine as long as the SPX remains above 2785. 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.