CPC Put/Call Ratio Daily Chart; Significant Stock Market Top At Hand

The stock market is riding the Crazy Train, all aboard. It is comical. The complacency, fearlessness and euphoric bullishness has been ongoing for a month. This can only happen in the age of central bankers; the New Gilded Age. The last tradeable low in the stock market was March (CPC moves above 1.20 to indicate panic and fear). The put/call ratio is in a steady downward channel ever since and now down at 0.63 matching the other multi-year record lows indicating a significant stock market top is printing right now.

Traders and investors are buying tech stocks, any stocks, gold, silver, bitcoin, the orgy is in full swing. Traders swig down Fed wine and buy any stock with a heartbeat. Once the tickers are pumped up, they make the rounds again pumpin' them up some more. Aunt Ruth, that runs the local bingo hall, withdrew the organization's money from the bank on Main Street, and with the full backing of the Ladies Guild, and Mayor Windbag, that threw in a few thou of his own money, bot AMZN stock. The blue-haired gal's are now visiting nursing homes asking if other seniors want to get in on the stock market action before it is too late.

Alejandro, worried that he was losing out on a good thing, sold his truck, that he used for performing odd jobs around town to make ends meet, and bot AAPL stock. He is bragging at Walt's Bar that he plans to buy a brand new truck in a couple months after the stock continues higher. Uncle Albert, who contracted covid and is laying in a hospital bed on a ventilator, was asked if tech stocks are still a buy and he tapped the side rail of the bed once to signify yes, so his daughter placed his entire life savings in tech and chip stocks. No one believes stocks will ever go down since the Fed and other central banks will always save the day. Moral hazard. The central bankers are the market.

The flat and topping 21-day MA and direction change in March nailed the bottom in stocks (green bar). The 21-day MA is now bottoming twice indicating a significant top in the stock market. The early June low looked like it was a done deal, remember that?, but then the Fed members ran to microphones and podiums promising plenty of accomodation with sprinkles of money-printing on top. At the same time, the Congress is providing stimulus plans, President Trump is touting more easy money for folks, all the liquidity sends stocks joyously higher. The vaccine hype continues pumping stocks relentlessly higher.

It is a Godot Top for these reasons but unlike Godot that never did show up, the selling will show up and at any minute, any hour, any day ahead. The complacency is so rampant and lasting a month, which is long, that it would not be surprising to see stocks collapse no matter what the Fed says this week and regardless of whether the consensus is hawkish or dovish. It is going to be a doozy. You may see a couple-few more days of choppiness but this egg is about to crack wide open. It is going to be fun to see how far she collapses. Due to the way this top is a long-time coming, a month or so, it would not be surprising to see the SPX down 200 to 400 points a couple weeks or so from now.

A flash crash or Black Tuesday, Black Wednesday, Black whatever day, is firmly on the table. These are the types of events a speculator lives for; there is lots of excitement coming. The scythes and sickles were sharpened out in the workshop today. Make sure you are prepared. Also, consider that for the February/March crash, the dollar skyrocketed as both stocks and gold plummeted. You are nuts if you do not, or have not already, trimmed back on all your longs and brought on short positions. The stock market is likely looking for a catalyst, or a spark, that will set the powder keg off and blow it all sky high. "Look out, Mama." 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.