CPC Put/Call Ratio Daily Chart Signals Significant Market Top

Here is another update for the CPC put/call chart. The bulls continue to show complacency and complete lack of fear.  The central bankers have trained traders to expect bullish markets forever forward and the traders are drinking the Koolaid.  The market top occurred in February-April as the compalcency ruled.  Now, at sub 0.80 numbers, the complacency and same circumstances are in place. The red circle in May shows the 10 MA crossing above the 21 MA which verified the continued spike higher with the CPC, which is a move to fear, which occurred as the markets tumbled lower in May, the complacency was long forgotten at that point. In early June, the 10-day MA drops back under the 21-day MA which signaled the market recovery and the beginning of the rally for equities.  Thus, watch the red circle in the margin since the 10 moving back above the 21 will signal bigtime market turmoil.

Two weeks ago, note the lower low in the CPC. This printed with the indicators all positively diverged except for the MACD line.  Thus, the CPC bounced from the positive divergence, which was in agreement with the drop in the SPX from 1390 down to 1360. The weak and bleak MACD line wants to see a matching or lower low in the CPC before it provides its blessing with positive divergence.  You can clearly see that all the indicators are sloping up so if the CPC was only a couple ticks lower, say 0.78 or lower, this would be firm universal positive divergence that would launch the CPC. It is close enough for government work, however, and a spike in the CPC would be expected corresponding to a broad market selloff.  If the markets head higher today, that will likely provide the lower CPC print to set up the reversal, but, the CPC can very well spike higher at anytime now which corresponds to markets selling off. 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.