CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts; Rampant Complacency Signals Near-Term Market Top At Hand

Keystone highlighted the low CPC and CPCE put/call ratios over the last couple weeks but the bulls continue to enjoy upside momentum. The happy central banker talk last week and current joyous tax bill talk send stocks higher. The market is news-driven. The rampant complacency continues as evidenced by the uber low CPC and CPCE put/call ratios. Traders are drunk as skunks on Fed wine and ECB champagne while smoking BOJ crack. Traders are in a euphoric stupor, donning lampshades on their heads and buying stocks at the ask. No one is concerned about a stock market selloff. This is also verified by the low VIX (volatility).

The low CPCE signals another stock market top in the near term (red circles) that will occur at anytime forward. The SPX print up at 2694.97, the highest number in the history of the stock market may serve as that near-term high. The SPX was only 5 points from 2700 today.

The red circles show what happens when traders become too complacent. What do you think will happen? The bears were jipped with the other shallow lows since the happy central banker talk and tax bill talk overruled the negativity. The euphoric bullishness is so off the charts now, however, that stocks definitely need to sell off and take a breather. It will not be surprising to see the SPX drop from 20 to 80 handles so 2600-ish is definitely on the table for early January.

Reference the SPX support/resistance information in the prior post. The downside support is 2680, 2676, 2668, 2660, 2652, 2639, 20-day MA at 2636, 2634, 2628, 200 EMA on the 60-minute chart at 2627, 2606, 2601 and the 50-day MA support at 2597. Note the air pocket from the 2620's to 2606. The top can occur at any time any day forward. If you enjoy profits from a spike in your longs during December, take the money and run. The tax bill impact on the market remains an unknown until mid-week. 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.