CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts; High Put/Calls Signal Tradeable Bottom Ahead

Remember when the low put/calls began triggering at the end of last year and Keystone told yinz to stay away from the stock market? Of course that was difficult since the market temptress teased steadily higher. Young traders gave way to the stock market seduction and bought Facebook, Apple, Amazon, Netflix and Alphabet (Google) with both hands.

Timmy Tech bragged every morning at the water cooler about owning all five of the FAANG stocks. He walked around the office like a crowing rooster with his chest proudly puffed out and posture erect. Yesterday, Timmy was crying into his cafe latte in the corner of the breakroom as he dealt with margin calls.

As usual, the smart money whipped everyone into a euphoric buying frenzy, with record highs in stocks occurring daily, since that is the easiest way to pass off overpriced shares to the bag-holding sucka's.

Typically, you see three or four distribution days at a top. The blue circles show the distribution days this year where the smart money hands off shares to Joe Sixpack, Ma and Pa Kettle, Aunt Nancy and Uncle Frank and of course Timmy Tech; the bag-holding sucka's. The money managers and paid hacks pump the public into a euphoric frenzy and distribute their overpriced shares to the masses while sneaking out the back door. The party ends abruptly.

The best part of it is now that the public was screwed out of say, -10% of their capital in a heartbeat, many will capitulate and take their losses, and, now that a tradeable bottom is beginning to appear, the smart money will console the bagholder and take those nasty shares off their hands in an accumulation phase. This is the rhythm of Wall Street.

The idea in December and January was to wait for a tradeable bottom to show up before nibbling on the long side and this would manifest by the CPC moving above 1.20 and the CPCE above 0.80. Well look at that. 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.