CPC Put/Call Ratio and SPX S&P 500 Daily Charts

The US stock market is one big party these days. The wealthy privileged class, that own huge equity portfolios, dance with glee as they rape the country for all its worth. The Federal Reserve members are all too eager to maintain accomodative monetary policy since they will be rewarded with a quid pro quo by the investment banks once they leave public office. Crony capitalism has gone amuck in America.

One-half of the country does not own a single share of stock. As the recession approaches, so will a class war in the US. The divide between rich and poor in America is at a 50-year peak. Ironically, it was back in the 1970's when you saw such disparity between the rich and poor and that was the decade where a common person would utter daily, "F the rich." History repeats.

Crony capitalism is on its last legs. The years ahead will be fascinating to watch. History teaches us many lessons on socialism systems failing. Ditto communism and fascism regimes as well as dictatorships. However, the collapse of capitalism is a new animal to behold. The crony capitalism continues in America until faith and confidence is lost in the Federal Reserve, and other global central bankers, that collude daily to keep the world's stock markets propped-up.

In the near-term, the stock market complacency is off the charts; literally. Traders and investors have not been this euphorically bullish since June 2018 over one year ago. Floor traders don lamp shades on their heads daily, dancing a jig of joy as they buy stocks by throwing a dart at a dartboard. The Fed and other central bankers have promised easy money forever so there is no need for worry or fear. Everyone is buying the stock market fully expecting the party to continue without pause.

As a general rule, you want to think about going long and participating in a tradeable bottom when the CPC pops above 1.20-ish or is at least near there. Above 1.20 confirms that traders are fearful. They do not expect stocks to ever recover again; there is nothing but doom and gloom ahead. Blood is flowing in the streets and traders are jumping from windows; hopefully they are on the ground floor. Of course, this is the time to buy.

Conversely, a CPC below 0.80 increases your radar in expecting a market pullback. Traders are drunk as skunks buying stocks with reckless abandon. It does not matter what you buy since everything will go up forever. Of course, this is the time to sell.

The red circles show past times over the last year where traders became euphoric and sure enough, all are stock market tops. The green circles show rampant fear and panic which correspond to market bottoms. Humans are so predictable. What do you think will happen in the days and couple weeks ahead?

It is a tricky time for the stock market since next week is a crazy economic data barrage as well as more earnings. The BOJ, Fed and BOE will all release rate decisions. The month of July ends (EOM). The Jobs Report is next Friday. Interestingly, the ominous new moon lurks in the background on hump day peaking for the month at 11:11 PM EST (stock are typically weak moving through the new moon). Epic stock market history is occurring each day which will be talked about for decades to come. 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.