CPCE Put/Call Ratio Monthly Chart; CPCE Monthly Print is Lowest Ever; Rampant Complacency and Fearlessness Signal Significant Stock Market Top At Hand

The CPCE put/call ratio prints the lowest number ever signaling rampant complacency and a substantial stock market top at hand. Everybody and his bro are euphorically bullish and do not believe that stocks can ever go down again. If it was 1929, economist Irving Fisher would proclaim, "We are at a permanent plateau." The fearless crowd believes that stocks will grow to the sky forever pumped higher by vaccine happy talk, more monetary (Federal Reserve) stimulus and money-printing schemes from Chairman Powell and more fiscal (Congress; US government) stimulus dough once Janet Yellen, Queen of the Doves, is steering the Treasury pirate ship under President Biden.

Now that the sensationalized first paragraph is finished, the CPCE chart data is only from 2004 to present so only 16 years. The CPC data goes back to the 1990's and there are lower readings on that chart but it communicates the same idea as shown above.

The red circles show the party in full swing with investors believing that stocks will never selloff again. Traders are throwing darts at the stock pages to pick tickers since everything rallies. Purchases of calls are outpacing puts massively (larger number in the denominator pulls the ratio number down). Frankie was given a chimpanzee on loan from the zoo, and each time it points at the computer screen he buys that stock since making money is so effortless and easy. Traders and investors are drunk as skunks off Fed whiskey, ECB champagne, BOJ sake and PBOC wine, buying any stock with a heartbeat. What a great and easy life it is; well, if you have a lot of money it is, not so much if you are one of the 300 million huddled masses, especially since over one-half of these folks (165 million people and more) do not own one single share of stock. When investors are over-the-top bullish, like now, there is a comeuppance needed and a come-to-Jesus moment is at hand. If you own a huge portfolio and it is all in stocks held on the long side, you are about to meet the Lord.

The green circles show fear and panic, despair, misery and a belief that stocks will never rally again. Purchases of puts are outpacing calls massively (larger number in the numerator pulls the ratio number up). A big selloff typically occurs causing massive liquidations. Margin calls are enforced and the selling accelerates taking out stops. The baby, and the bathwater, are thrown out, as well as the kitchen sink. During the February/March bloodbath this year, Timmy Trader jumped out the window because he lost millions of his clients money. The trading floor was aghast at the sight but then everyone realized they were on the ground floor. Blood and carnage is flowing on Wall Street. Investors regret ever becoming involved in trading as they lose thousands of dollars quickly. When traders give up hope and swear they will never buy a stock again as long as they live, that is the perfect time to buy. You want to run towards the burning building while everyone else is running from it with their hair on fire.

What do you think is going to happen?

The purple channel shows what Keystone calls the 'last legitimate top in the stock market'. It is obscene how the four central banker horseman of the financial apocalypse (Fed, ECB, BOJ and PBOC) have pumped the stock market to ridiculous heights to enrich the wealthy at the expense of the poor. The stock market was saved by former Fed Chairman Bernanke in March 2009 with QE1; he started printing money like a madman to save equities and protect the wealthy class. By 2014 and 2015, stocks were already bloated on the phony easy money goosing.

During spring 2015, the stock market was printing a serious top and collapsed. It was over. The SPX was headed back to the 1200-1400 range so the Fed stepped in with infinite fire power saving the day in 2016 and the rest is history with indexes printing new records last week. It is truly nauseating to watch how the wealthy elite privileged class uses the rigged crony capitalism system to rape America for all its worth. Oh well, this is in the end phase now with crony capitalism about to be brought to its knees in the years ahead; a serious class war, including violence, is on the come.

Over the last five decades, the wealthy class destroyed the middle class by shipping jobs overseas. The privileged class took advantage of the slave labor in China and elsewhere to increase corporate profits, which increased stock prices, which made them all more filthy rich. The top 1% in America own one-half of the stock market. One-half of Americans do not own a single share of stock.

The periodic uprisings in the states, such as the initial loss of textile jobs across the south in the 1970's, then steel jobs, auto jobs, manufacturing jobs, etc..., were tempered by the elite class telling the stupid huddled masses that they now have cheap goods available at Walmart. Many Americans did not care about others losing their jobs as the decades ticked by (since they kept working and now purchased cheap stuff at Walmart) until the job losses came for them. As Donne wrote poetically, do not ask 'for whom the bell tolls, (because) it tolls for thee'. The obvious downside to this ongoing implosion of the crony capitalism system is that the middle class is gonzo, and it was the fabric that used to hold the country together. Hence, social unrest develops and will worsen considerably going forward.

Humorously, there are actually idiots in America that think capitalism exists. It does not. America is a faux free market crony capitalism system that worships corporate socialism. Don't be an American Idiot. The system can be fixed by a hybrid capitalism/socialism model, perhaps using the Nordic models as a guide, but it will take a decade or two to get there. If you were rich, would you give up the easy money ride easily? Heck no. The wealthy make money effortlessly by tapping key strokes on the computer and never breaking a sweat. This is America, baby. Land of the have's and have not's. The New Gilded Age is upon us a la the 1920's.

If you are holding long positions in the stock market, get out. Simply toss the money into cash holdings and watch things for a few months. You will be glad you did. Do not be surprised if the stock market is down in that purple channel a year or two from now. If you want to play, then short all rallies going forward and keep building short positions. Do not rule out a flash crash event occurring in the near-term. Stay alert.  It's going to be fun, well, fun for a speculator. 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.