CPC Put/Call Daily Chart

Hear is the Fear Index. Under 0.8 indicates complacency in the markets, no fear at all, a belief that markets will go up without any worries. Of course the opposite happens and markets sell off. Conversely, when the CPC moves above 1.20 that shows worry and fear in the markets, the party is over, traders are now frantically worried about losing money each day on the long side, so, the markets do the opposite and rally. When the boat is fully loaded on one side make sure you walk over to the other side. Complacency remains since the spike to 1.10 was quickly retraced.

When the June bottom occurred for the markets, note how the CPC signalled the bottom was in with prints spiking well above 1.20 to tell you the fear was rampant, perhaps one or two traders jumped out a window, let's hope it was a first floor window.  So markets rallied strongly from June on. The red box shows when the 20 MA crossed above the 200 MA that  was when the plus 1.20 prints started occurring, thus, look for the same fractal action to occur now, see if the 20 moves above the 200 MA this week. The market top was called successfully due to the uber low 0.7 prints and now price is being squeezed into the sideways triangle. Perhaps it will stay in the apex until the election results are known Tuesday evening. Even if the CPC would drop towards the 0.7's again, which means the broad indexes will be running higher, that will only set up a new top.

If you only like to trade on the long side, and are hoping for the market bulls to make a comeback, you do not really want to be long until you see the CPC print higher. Once over 1.20 the nibbling on longs can begin since a base is forming in the markets for a rally. Projection is for a spike into the 1.20 area at some point which will correspond to a near term bottom for the broad indexes, the SPX in the 1390's, perhaps lower, in the 1350-1380 zone, and, perhaps even lower than that. It will depend on how high the CPC spikes. If the CPC moves upwards slowly, then the markets can fall a long ways. The bulls would be smart to let go of the handlebars and simply let the markets drop, the fear come in with the CPC spiking over 1.20, then that will serve as an all-clear to jump on the long side and ride the bull train once again. With the election, and ECB this week, flip a coin, the action is going to be a circus. 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.