CPC Put/Call Ratio Signals Significant Market Top

The CPC put/call dropped down into the 0.7's indicating uber complacency. The wine is flowing like water, as well as the eggnog, and the bulls are wearing lamp shades celebrating the holidays without any worries or fears about the markets. When the CPC moves above 1.20 and higher, this is a very attractive area to go long the markets since it indicates that a significant tradeable bottom has occurred.  The mid-November bottom was clearly identified although it was sneaky, since the CPC barely made it above 1.20, and, normally a jog would be expected where the CPC may have spiked higher after a day or two, then rolled over lower. Alas, that poke above 1.20 was quick and the market bottom was placed.

Late November, a stutter step move occurred, mainly intraday, with a large drop in the markets signaled by the uber low sub 0.65 number, if you remember, Keystone posted that chart the evening that print occurred and the market collapsed the next morning. However, the CPC jumped immediately higher to 1.17 and that was good enough for a quick reversal yet again, identifying an intraday bottom, and a continuation of the market rally up thru the present.  Note that the only panic and fear in the markets was a tiny smidge of fear in mid-November at 1.23-ish, for one day, barely producing one bead of sweat on a trader's forehead.

Note, however, the topping behavior shown by the red circles. Everytime the CPC drops under 0.77-ish, the complacency is too far off the charts, and the markets need to sell off. The current print is 0.71 showing that traders are more concerned with sending Christmas cards and attending four-hour lunches. There is no fear in the markets, therefore, do not trust all this market bullishness and it is prudent to consider shorts now for a hedge if heavily long. Considering the bullish futures as this is typed, the market pop today may be the top identified by the uber complacency above. 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.