On the upper side, the opposite occurs. Once the markets start dropping and the selling intensifies, traders become scared. The bottle of booze is placed to the side and instead traders search for a blankie, fear and panic is rampant, traders start to worry that the selling will not end, the markets will continue dropping far lower. Of course this identifies the market bottom, which we are concerned with identifying over the coming days and month. Days ago a 1.20 printed which is the level to use where a market bottom may occur. The markets have experienced bouancy since then. However, note the blue squares showing the fractal from the May selloff. If the current action follows the same path, the selling is about halfway done. The small red square shows where the CPC is dropping thru the 200-day MA a tthe same time the 20-day MA is moving up thru the 200-day MA, just like May. The next move was another strong push of market selling that took the markets down to the late May bottom and then the summer rally started just as June started. The indicators are long and strong and agreeable to seeing another higher high than the 1.20 print. The black circle would be an ideal target where long positions should be brought on and already in place since a market rally is about to occur. The black circle would correspond to the SPX at about 1335-1365, maybe 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.
I'm glad you revisited this one. I was shaking my head at tonight's 0.83 print. KS, is there any way during the trading day to guesstimate where this might end up after the close?
ReplyDeleteWell, you do not want to look at the CPC that way, Keystone likes to use the end of day print, EOD. The CPC is not a quick real-time indicator, it is more pertinent to the day, days and week or two time frame. So this makes the intraday stuff for the put/call not all that important. In its most basic form the CPC is a great fear gauge where you have a tool that can tell you the overall sentiment of the market, say, in the daily time frame. So simply seeing a 0.8-ish print, and only the tiniest tease of the 1.20 level that had occurred, the chart hints that a higher high above 1.2 should occur and that will signal an all clear to move strongly into bullish positions if the black circle prints.
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