CPC Put/Call Ratio Daily Chart Signals Significant Market Top

Time for an update of the put/call. Traders are wringing their hands these days, yanking handkerchiefs from pockets and dabbing beads of sweat off the forehead, while waxing fear and worry over the stock markets. Don't believe it.  The CPC drops down into the low 0.7's again showing the uber complacency remains in place. In other words, traders, analysts and other media pundits are saying they are worried but as soon as they wipe away the crocodile tears, they are long and strong to beat the band.  The chart shows the late April top due to complacency. Then the fear ran rampant with the CPC jumping over 1.20 which identified the market bottom.  At that time, with the high CPC, the traders and analysts were waxing worry and they truly were worried, and should have been worried. The high CPC shows that a few chaps may have even jumped out windows as the fear exploded higher.

Ever since the Draghi announcement late July pledging unlimited support for the euro, the markets have been in this central banker rally mode. Mid-August identified a market top, then mid-September identified a significant market top, which occurred, and it identified the 1475 high for the year thus far, then a market selloff.  However, as the CPC moved up, and markets moved down, as would be expected, the bears ran out of gas and with the 'don't fight the Fed' mantra echoing in traders ears, the downside stalls and here we are today with another uber low complacency print.  This 0.74 signals that the markets are placing a significant market top right now. Hang on to your hat.

Note the steady eddy move higher over the last few days. The markets could have continued an orderly selloff and printed a CPC over 1.20 which would identify a market bottom, but instead, the uber bulls are back in the game and the boat is fully loaded on the long side once again.  The markets are not worth entering for longer term long positions until the CPC prints above 1.20.

Perform your soul-searching for any long positions since once the markets roll over you may not see these levels for a long time. Keystone mentioned for you to do your soul-searching a couple weeks ago at the previous low CPC prints, rarely do you get a second chance. Look at late April, that never gave you a second chance. Projection is for very limited market upside remaining and a significant market selloff to begin in earnest at anytime. Once the markets turn down, Keybot the Quant flipping short will lock in the move lower. 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.