CPCE Put/Call Ratio Daily Chart

The CPCE moves higher to 0.75. If the stock market sells off on Tuesday, that action will create more fear and panic that will send the CPCE higher and work towards placing a tradeable near term bottom. It will depend a lot on the action after the opening bell. If stocks rally then the CPCE will likely drop and keep playing around in that center range.

The stock market tops are shown by the red circles (complacency) and stock market bottoms by the green circles (fear). What do you think will happen? So the 0.78-ish level and higher is a great indication for a market bottom in place and time to buy longs for a quickie ride higher. Under 0.50 marks a significant market top. Note that the top during the final days of December occurred with the low sub 0.50 that Keystone pointed out at the time. The three tops since then are cheesy with the CPCE only coming down to the 0.55-ish area.

The chart tells you that if the stock market sells off, it would be prudent to nibble long but only for nimble traders or day traders since the recovery move may be fast, a few days and then you likely want to get out again. A market bottom should occur in the green circle on the right and that will likely be either tomorrow or Wednesday. Other charts or indicators require review to see if they agree with this conclusion. 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.