CPC Put/Call Ratio Daily Chart Signals Market Top

The put/call ratio printed 0.74 today, the lowest number since late July. We all know what happened days later, the market slide into the August waterfall crash. Keystone uses the CPC as a tool to identify market tops and bottoms.  Market bottoms occur when the CPC prints above 1.20. At that time, fear is rampant in the markets, traders are worried that the markets will continue falling, thus, since the CPC provides a contrarian vibe, the markets bottom instead and head upwards.

Tonight's print is on the opposite end.  When the CPC drops lower and prints in the 0.70's or lower, that shows the traders to be complacent, the wine is flowing like water, there is no fear, there is no worry, happy days are truly here again.  The bulls pile into a higher number of calls forcing the ratio to drop ever lower. Then, as the contrarian vibe kicks in, right when traders are all convinced that markets have no where to go but up, just like now with all the bullish media talk, the markets kick in to the downside.  Hang on, this chart says the broad markets have a wild downhill ride ahead and it should begin at anytime. Best to prepare yourself.  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.