The red circles show recent market tops, all occurring out of complacency and lack of fear. Conversely, the green circles show when fear and panic entered the markets, the ideal time to go long. The bulls are favored over the last couple years so moving forward it makes sense that markets should take a more extended break and revert to the mean allowing the bears to run. The lack of fear will continue until the markets sufficiently sell off creating fear and panic.
If wanting to put new money to work in the weekly and monthly time frame (not day-trading or day to day position and swing trading), but the short side is not your bag, simply sit and wait before bringing on longs. Develop a long shopping list of companies and indexes you would like to buy. When the CPC moves above 1.20, start to initiate long positions and by the time the CPC drops and falls under 1.20 all the long positions should be in place. The complacency must be rung out of the markets and fear must be seen in trader's eyes. This can only occur when the CPC moves above 1.20 to show excessive put buying and worry. 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.
via Reuters feed:
ReplyDelete''PBOC says China to increase financial support to the economy.''
V.
KS-
ReplyDeleteI love the CPC Put-Call Indicator, its been a great tool this year. The dip buyers have been successful all year, right now with the 10-year yield facing strong resistance at 2.8%, why don't you think the buy-the-dip strategy would not be effective here? Its worked like magic for years, what changes now? The 10 year yield isn't going to breakout over 3% or more like everyone thinks.
The bears have been given so many head fakes this year only to be beaten by the bulls over and over, why do you think this time would be different?
FeS2
CPC's are only one tool. The buy the dips were only successful since they were bot when CPC was at or near 1.20 CPC or higher. They would not have been attractive buy points otherwise. For the intermediate and longer term picture, the SPX daily and weekly charts remain negative, and, if you review the Cyclical Market Signals page, we have been in a cyclical bull for quite some time. The overall rally is 4 1/2 years, very very long in the tooth. The most dependable cycle, the 18-yr cycle says secular bear thru 2018. So the markets may have placed a significant long term top.
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