CPC Put/Call Ratio Daily Chart Signals Market Top

The CPC put/call ratio drops under 0.70 printing one-month lows verifying the ongoing market complacency and lack of fear and signaling a market top at hand. The red circles show the recent tops resulting in SPX drops, from left to right, of 110, 40 (early March), 80 (early April), 55 (mid April), 40 (May) and 30 (June), respectively. A range of from 30 to 110 SPX handles of downside and an average of a 60-handle drop in the SPX.

The market topped out roughly in line with the low CPC prints although the market peaked to begin the year about 4 or 5 days after the low print in the CPC and the February low print needed another week or so to indentify the market top in early March. Thus, the stock market is expected to top right now, today, or next week, and drop about 60 SPX handles. Stocks are best purchased when a whiff of fear and panic develops above 1.20 but as seen by the chart the bear case has been shown zero respect. That will change going forward. Charts always revert Fed or no Fed. For the short term (days and weeks), the stock market should top out in this area and pull back for a rest. Reference the CPCE chart previously posted for further study. 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.