CPC Put/Call Ratio and SPX Daily Charts Identify Market Tops and Bottoms Markets Now Placing Significant Top

When the CPC is in the low 0.7's and lower, the complacency is rampant. The wine is flowing like water as every day is a drunken upside orgy in the broad indexes. Traders have zero fear or worry about anything bad happening. Of course, the opposite happens as the red circles verify.  When the CPC moves above 1.20, that signals fear and panic with traders jumping out of windows, hopefully only first-floor windows.  Traders are pulling their hair out screaming to run for your lives and the end is near. Of course, the opposite happens as the green circles verify.  Note that the bears have been jipped for a year with only a tiny move above 1.20 to identify the mid-November bottom. The mean always reverts so plenty of market bearishness will show up in due time. The CPC 0.71 print yesterday says that now is the time.

Obviously, protection is required if net long. The September top resulted in about a 120-handle drop in the SPX, the November mini top only created a 10-handle pull back, the mid-December pull-back was a 50-handle drop, and now we have another low print at 0.71 or lower so this time the SPX will pull back _____?  Averaging the three recent tops is 120+10+50 = 180 so the average pull back is 60 handles. Considering all the uber bullish euphoria lately, a pull-back of 50 to 100 handles would not be surprising. We do not have to wait long since the 0.71 just printed. It will only be days before the drop starts, perhaps the Jobs Report that is imminent may be a catalyst. Even if the broad indexes move up today, the CPC will likely recoil back down to 0.70 which only further locks in the market's fate ahead. 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.