CPC Put/Call Ratio Daily Chart Signals Significant Market Top

The markets are fascinating these days. The wall of worry is on a milk carton. There is zero fear and worry. Traders are extremely complacent now, especially in recent days. The majority of market participants are on the long side now fully convinced that the SPX will punch out a new closing high above 1565 today and the 1576 all-time high should give way any day as well. Traders are completely fearless right now. The economic data has been encouraging in recent days but the SPX reaction was muted, but yesterday, any remaining bears gave up and threw in the towel as the SPX printed new highs. Traders feel it is inevitable, if not their right, to now see new all-time highs in the SPX.

The CPC put/call prints another low 0.7 number verifying the rampant market complacency. Ditto the low VIX now under 11.50, a six-year low, levels not seen since the 2007 market top. The low 0.73 CPC says the bears are waiting to see the white's of the bull's eyes. The fearlessness will reverse violently, perhaps today, perhaps Monday, or any  of the coming days, and the CPC will leap higher towards fear and panic which will not appear until 1.2+. The spike higher in CPC will create market selling.  Stocks are not attractive from the long side until the CPC shows panic and fear above 1.2. If the SPX places further new highs, the CPC may print even lower at 0.70 or under, which only increases the complacency further setting up a reversal.

Projection is for a strong up move in the CPC to occur any day. The broad indexes are at a significant market top right now. Traders are not pricing in any geopolitical events, or any events State-side for that matter. Potential negative catalysts include Italy's decision today or early next year and also the FOMC drama slated for 2PM EST Wednesday. The low CPC does not need a catalyst to create market selling. The uber complacency right now is plenty to create a significant market down move. If Italy or the FOMC fall off the rails, that is where a down move can turn into something much more violent. Extreme vigilance is required for the days and few weeks ahead. A wild roller coaster ride is about to begin. 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.