CPCE Put/Call Ratio Daily Chart

A few days ago the CPCE was up at 0.75+ matching the prior levels where market bottoms occurred and sure enough, another bottom occurs. Now the CPCE drops to 0.55 in the area consistent with market tops. The lower readings create a market top (red circles) since traders are far too complacent and worry-free buying stocks without any concern. Market bottoms (green circles) occur at higher CPCE levels since that signals traders that are worried and beginning to panic.

The projection would be that a near-term top is at hand. The wild card is the Monthly Jobs Report at 8:30 AM EST since futures will violently swing one way or the other. If the bears win then the market top will be in as per the chart above. If the bulls win tomorrow, then the CPCE should come down again as traders become more bullish and euphoric on a happy jobs number. So that would set up the potential market top for early next week.

Note that the CPCE is at the same level as the early December jog move when markets were topping out. That same fractal may play out for the days ahead where markets drop for a near-term bottom but it is very shallow and equities quickly recover after a couple-few days to another high. That next stock market high would occur with the CPCE dropping to the lower 0.50-0.55 area, like the first week of December, that then ushered in the top and drop from SPX 2075 down to 1975; a 100-handle collapse. 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.