Sunday, December 2, 2018
CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts; Stock Market Top At Hand
Remember a few days ago, Keystone told you that the fear and panic was off the charts? Blood was flowing in the streets. The sky was falling. The baby and the bathwater, and the sink, were all thrown out the window. That fear-laden behavior is verified by the green circles as was previously pointed-out, and bingo, the SPX bounces a 120 handles.
Of course the Wall Street lemmings only know one extreme or the other; there is no middle-ground zen. Thus, the worry and fear and oh woe is me attitude gives way to euphoric joy. Bulls throw confetti as the SPX ran above the critical 12-month MA at 2752 which separates a cyclical (weeks and months ahead) bull from a cyclical bear. The SPX begins the new week of trading from 2760 with the cyclical bulls winning going forward. Bears got absolutely nothing unless they can push the S&P 500 back below 2752
The party stalled slightly on Friday due to the Trump-Xi meeting at the G20 Summit in Buenos Aires, Argentina. The two leaders do the tango last night, cheek to cheek, agreeing to delay the planned increase in tariffs. Considering the charts above, this is great news because it probably will provide a rising market to short into.
As always, it may take a day or few for the top to print; it can occur any minute, hour or day going forward. US markets will be closed on Wednesday due to a national day of mourning due to the passing of former President George HW Bush known as Bush 41 (41st POTUS and father of the 43rd). The Jobs Report is on Friday so the circus is coming to town. Interestingly, this Friday is jobs day, the government shutdown deadline day, a new moon when stocks are typically weak and Pearl Harbor Day. Tora! Tora! Tora! Tora!
So you know the drill by now for the charts above. Traders are drunk as skunks on Fed wine buying stocks at the ask. The US-China trade deal should create additional joy. Futures open in a few minutes. You may see the put/calls come down further as a party atmosphere may develop. As everyone celebrates, sneak out the back door scaling out of your longs this week while scaling into shorts.
You can ditch longs when the TICK machine hits +900 and higher; this will squeeze a few more pennies out of your long trades you are exiting. Same with bringing on shorts, bring them on when you see the TICK machine above +1000 this week to get a higher price to short from. 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.
Note Added Sunday Evening, 12/2/18, at 6:06 PM EST: US futures rocket launch on the US-China trade deal. Holy smokes. S&P futures leap 44 points higher. Dow +416. Nasdaq +135. Russell +21. The bull party is in full swing as the week begins.