CPCE Put/Call Ratio Daily Chart Signals Market Top

The bull-bear struggle continues for the markets and equities can easily jump one way or the other on the daily basis. But moving into the day and week time frame, the bears should win out. The uber low 0.50 CPCE signals over-the-top complacency. The far majority of traders believe that Syria will work out, the Fed will keep supplying easy money, and the politicians will kick the can down the road again, so there is nothing at all to worry about. Party on, Garth. When complacency and lack of fear reach these levels, the markets need to correct and introduce traders to panic and fear.

The market bottoms in mid-June and then at 6/22-6/24 were easy to identify since panic and fear was felt by traders at CPCE +0.80. The July 4th bottom, when the BOE and ECB launched global equities, followed by more Fed pumping, was identified by the 0.76 which was the last whiff of fear that any trader has experienced. It is one big par-tay since then. The wine is flowing like water. Traders are donning lamp shades this weekend, drunk as skunks, since they are entirely at ease that markets will go up forever (CPCE 0.50). Friday's action verifies the erratic behavior of the stock market currently and a violent move, either up or down, may be on tap for early in the week. However, independent of the VST direction, if you view the markets more in a weekly time frame, the low CPCE says equities will be far lower about one month from now. Markets should sell off until fear and panic returns with a CPCE above 0.80. So, if bearish, the short term noise is likely best ignored, since the uber complacency should get the better of the bulls moving forward. The projection, based on the CPCE above, is far lower equities moving forward. 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.