CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts: Rampant Complacency; Significant Stock Market Top At Hand

Jackson Pollock would be impressed with the abstract display above. The CPC and CPCE sticks of dynamite have the longest fuses in history. In other words, the last several months are one of the most complacent and fearless periods in the stock market ever. With this complacency comes a significant stock market top. 

The stock market joy continues due to the Federal Reserve printing money like madmen (monetary stimulus) for a dozen years and now Congress throwing money (fiscal stimulus) from balconies to the adoring crowds below. The Fed succeeds in making the rich wealthy beyond their wildest dreams.

The last tradeable bottom was March of last year. Fear and panic hit (green circle) so the bottom was in. Always run into the burning building while everyone else is running away. When the CPC and CPCE put/call ratios spike higher, that indicates fear, panic, worry, angst and traders and investors that want out of the stock market no matter what. That is when you gladly take their shares and go long.

The stock market continues printing an epic long-term top this year (red circles and dynamite cartoons) with complacency and fearlessness off the charts. No one worries about being quadruple long the stock market on leverage in the most risky stocks since the Fed will always print money and stocks will never stay down for long. This is when you encourage the sucka's to buy more stocks and you just so happen to have some here that they can have. Go short when the complacency is off the charts. There is a major reckoning about to occur. Get out of the stock market if on the long side.

Investors and traders always think there will be time to exit so there is no need to be in a rush to exit. Also, with the Fed's money-printing, any pullback is simply a buying opportunity, so they say. When stocks begin dropping, people will try to buy dips but they will only receive their heads on a platter. Then folks will understand the buy the dip story is over and then the real fun begins with the blood flowing like water on Wall Street.

There can be a flash crash at anytime or an event in Asia or elsewhere overnight that triggers a wild event in the stock market. The exchanges may close for a day or few at some point forward. It is going to be a wild and crazy time. Fun for some. Pain for most.

You should be out of the stock market on the long side and holding some shorts. Place the bulk of your portfolio in cash and let it sit there a while if you do not want to short the market. Do not nibble long until you see the CPC moving above 1.10 and you should really see 1.20; that is when you can begin scaling into the stocks that you have on your long watch list that you have been researching and looking at their charts. Likewise, do not nibble on the long side of the stock market until the CPCE moves above 0.70-0.75, and preferably, 0.80; that is when you can start buying your long plays with confidence.

The CPC and CPCE fuses are speeding-up and the explosions will occur at anytime (stocks will collapse). Plan accordingly. 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 Monday Morning, 6/28/21, at 6:00 AM EST: The S&P 500 prints an all-time high, the highest number in history, at 4286.12 and also a new all-time closing high at 4280.70 on Friday, 6/25/21. Congress may be reaching a deal with an infrastructure bill so another buying frenzy occurs due to the proposed fiscal stimulus. Meanwhile, Chairman Powell is flying above the crowd in his white dove suit dropping money from the sky (monetary stimulus) like Caligula throwing coins from the marble pillar. The overwhelming bullishness and off the charts complacency, as evidenced by the ongoing uber low CPC and CPCE put/call ratios, continues. Traders are drunk as skunks off Fed wine buying any stock with a heartbeat. Queen's College President Mohamed El-Erian, much-followed after he left PIMCO years ago, proclaims, "In the short term we should not, NOT, fade this rally." Wharton professor Jeremy Siegel decrees, "The trend of the market is decidedly upwards. The money will continue to flow into the stock market. I still like stocks." Jefferies Sean Darby says markets are in a "goldilocks" period expecting stock markets to remain elevated this year. BNP Paribas Daniel Ahn says market will cope with higher yields decreeing, "We are constructive on equities." When asked about risks, he says yes, but the risks are to the upside with explosively higher growth. The bullishness is obviously at euphoric levels. No one cares even if stocks do retreat because the Federal Reserve will always save the day. It is sick. Crony capitalism on full display. The world's investors proclaim nothing but blue skies and rainbows ahead. The future is so bright you gotta wear shades as Timbuk 3 sings. The Fed is passing out rose-colored glasses for the last 12 years. Get out of the stock market (if long) or you will regret it.