CPCE Put/Call Ratio Daily Chart Signals Near-Term Market Top

Remember Keystone pointed out the uber complacency with the maroon circle last Wednesday, 12/16/15? Low numbers signal trader complacency. Market participants are busy drinking Fed booze and smoking BOJ and ECB crack and do not have any worries that stocks will ever sell off. The boat was fully loaded to one side. Instead,12/17/15 and 12/18/15 flushed lower as would be expected by the low put/call.

In only a few days time, here we go again now at the red circle. Traders have short memories. They are now sipping Fed eggnog and smoking the BOJ and ECB mistletoe again care free and fearless. Traders believe stocks will go up forever due to easy money as the low 0.56 CPCE indicates. They are buying on the long side not even paying attention to what they are buying so you know what is likely to happen. Yes, another near-term top.

The seasonality factors are in the bulls favor with bullishness expected before a 3-day holiday weekend. The Santa Claus rally is technically between Christmas and New Years and into the first two days of the new year, however, traders have jumped the gun. Tomorrow is also a rare full moon Christmas and stocks are typically buooyant moving through a full moon. So the bulls have the wind at their backs seasonality-wise.

The CPCE says a top will occur any time, any day forward and another selloff of 40 to 80 SPX handles would be expected in the near-term. The holiday and today's early close creates odd market action. Volume is light. The expectation is that stocks should top out on Monday, if not, then Tuesday. It may be prudent to dump longs that you are not in love with or do not plan to hold for several years. 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.