The put/calls indicate that a significant market top is in place, contrary to the significant bottom in June. Stocks are not attractive on the long side until the CPC moves above 1.2 and the CPCE moves above 0.76. Until then, keep refining the long shopping list deciding which stocks you would like to own, study their fundamentals and charts so you can make steady confident decisions on going long when the time comes. When the put/calls shoot skyward, the panic and fear will create a worrisome market, so if you are ready with long selections and did your homework, you will be strolling through the fire and carnage whistling a happy tune as you scoop up bargains for the long side. Bears are favored moving forward until traders display fear and panic like mid-June. 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.
Why is the market surging even with such low CPC values?
ReplyDeleteFeS2
That would be expected Iron man. The low complacency numbers represent market bullishness. As the markets sell off the put/calls will move higher. Also think of these charts in relation to time frame. The put/calls did a great job highlighting the May top, June bottom, early August top, so this is over a multi-week time frame perhaps a month or two, so short-term venturing into the intermediate term. So markets may move up and down 20, 30 even 40 SPX points in the VST, days and weeks, but overall, the charts above say, that over time, over the next weeks perhaps a month, or two, or three, the put/calls are going to end up in the panic zone. So markets can rally some more, and put/calls can drop some more, but the end result will be an eventual move to the panic side which corresponds with lower equity markets.
DeleteGot it. Thanks so much for all the education and input.
ReplyDeleteFeS2