CBOE Skew Chart 2009 to 2012 Signals Significant Market Top

Here is the CBOE Skew chart over the last four years courtesy of our friends at Bloomberg. The annotations were added by Keystone.

http://www.bloomberg.com/quote/SKEW:IND

The blue circle shows the summer 2009 pullback after the start of QE1 in March 2009. There were non-believers in the power of liquidity and they won out, albeit briefly, only to see equities continue up for an epic market recovery, to this day, as Chairman Bernanke threw money out of helicopters to remedy the effects of the Fall 2008 crash.

The green circle identifies the January 2010 equities markets selloff to start the year.

The maroon circle shows how the CBOE Skew forecasted the May 2010 Flash Crash.

The black circles identify the tops in 2011; the first black circle is the February top, then the second circle identifes the market top for 2011, and the third black circle shows the start of the August 2011 crash.

The purple circle shows an uber high Skew at levels rarely if ever seen. What do you think the purple circle is forecasting?