CPC Put/Call Ratio Signals Market Top

Traders are complacent. The Fed said QE Infinity and the traders worship at Chairman Bernanke's altar. The near universal belief is that stocks will never go down again since the Fed will always prop them up. This is evidenced by the market stick-saves each of the last three days at the 10:30 AM EST time when the POMO pumps and BOJ yen weakening measures send equities higher. So traders are complacent without fear or worry that any market pull back will ever occur, and, of course that is when the market pull back occurs.

Market tops occur when the CPC prints in the 0.7's and lower. Market bottoms occur when the CPC prints 1.20 and higher. It is prudent to exit longs, unless it is a stock you are willing to hold a few years, and perform other measures to protect against the downside. Note the many tops in recent months but few bottoms. There is always a reversion to the mean where the bear side will be more favored in the future (higher CPC's). 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.