CPC Put/Call Ratio Daily Chart Signals Significant Market Top At Hand

The drama with the put/call ratio continues. Complacency is rampant. Traders are completely fearless buying any stock long without any fear or worry. The global central bankers are acting in collusion to keep stock markets elevated to make the rich, that own stocks, wealthier. The Federal Reserve, democrat and republican politicians, upper middle class and elite, company CEO's and business executives are an incestuous club and the common American is the bag holder. The ECB quantitative easing (QE) program is the latest player in the easy money party game a six-year orgy so obscene that Caligula would blush.

For a detailed description of the current complacency and market euphoria reference Keystone the Scribe's daily chronology (a link is in the right margin). Scroll down to the end of Friday's narrative and a couple paragraphs explain the ongoing market fearlessness which typically occurs at market tops. Everyone is giddy drinking wine each day and buying stocks with total disregard for price or valuation.

Keystone first highlighted the market complacency with the 4/15/15 low print (eight trading days ago). As Keystone has noted over the years, the low prints in the CPC and CPCE put/calls indicate a market top either right away or within a few days time. This time around is a little more tricky with a triple bottom in the CPC occurring over the last several days. The first low print resulted in the SPX dropping from 2113 to 2072. Surprisingly the bulls recovered very quickly; typically you would expect a bit more selling. China lowered the triple R requirements last Sunday, 4/19/15, which provided jet fuel for global stock markets all week long. The central bankers are the market.

The market euphoria continues with the middle low print at 0.79 on 4/20/15 (last Monday) warning of another market top. A small pull back occurs from SPX 2110 to 2090 only 20 handles and much of the move is intraday action so if you walked away from the computer for a cup of coffee or to visit the can you missed the move. The party atmosphere continues during the week and the Nasdaq explodes higher on Friday due to the joyous earnings with AMZN, GOOGL, MSFT and SBUX. It is this euphoric party atmosphere that dumps the CPCE to the 0.76 low a low not seen since December four months ago. That prior low in late December identified the market top to begin the year where the SPX dropped from 2095 to 1991 a downward move of 104 handles over five days (that was a quick flush).

The CPCE put/call ratio is at 0.60 and did not sink to new lows to match the CPC above, thus, the bulls may be able to pull off another day or two of upside juice where the CPCE will drop lower although this is not absolutely necessary. The triple lows in the CPC is extremely ominous.

If you did not buy puts for protection, or inverse ETF's such as SH, SDS, DOG, DXD, QID, and TWM, or short stocks and indexes, or exit your long positions, you made a mistake. If markets do drift higher early in the new week of trading consider it a gift and immediately implement your bearish strategy going forward. Markets are poised to sell off beginning any day forward and a reasonable expectation is for the SPX to drop from 40 to 100 handles as April finishes and early to mid-May occurs. The stock market is expected to sell off until the CPC prints above 1.20 to show that sufficient fear has returned to create a near-term market bottom.

As mentioned in the prior CPC message, scaling into the short side is prudent and despite the run-up in the indexes with the SPX back above 2100 and now printing new all-time record highs above 2120, continue scaling into the short side since the market top is nigh. Strap yourself in for a wild ride ahead to the downside. 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.