CPC and CPCE Put/Call Ratios Daily Charts; S&P 500 at Record High 3741; Significant Stock Market Top At Hand

The 21-day MA's for the CPC and CPCE put/call ratios both bottomed on 9/2/20 and the SPX top-ticked on the exact same day. What do you think will happen now? The holiday season throws a wrench (spanner) into the bear's plans since the Santa Claus rally typically runs from Christmas Eve into the first two days of the new year (now). The full moon peaks for the month in about 15 hours and stocks are usually buoyant through the full moon.

The SPX prints an all-time record high at 3740.51 and all-time closing high at 3735.36 both on Monday, 12/28/20.

The uber low put/call ratios signal a significant stock market top at hand. Aunt Jane, typically frugal with her hard-earned money that she saved from her years as the high school librarian, throws all caution to the wind and takes her entire life savings to the broker in town. His office is between the pizza parlor and laundromat. She placed all of her money in AAPL and AMZN stock and to be diversified, as the adviser suggested, so she bought TSLA stock as well. She never heard of margin interest before, and still did not quite understand it, but with stocks going up, she calculated all the retirement money that would yield, so she told the broker it sounds like a great idea. Jane was seen at the Ladies Guild meeting that evening bragging that she was all-in for the stock market and looking to buy the quintuple 5x tech ETF on leverage tomorrow. She proudly explained leverage to the other blue-haired gal's and now they all have decided to pull money together and go long the stock market before its too late. Betty said she will receive her social security check tomorrow and will put that in the pool and her granddaughter is laidoff but she is getting a lot of government money so they will put that money in the pot as well. Life and investing has never been so effortless and easy. The party is in full swing. Americans are not worried about coronavirus instead choosing to par-tay now they ignore the topping signals in the stock market choosing to par-tay. Americans like their red Solo cups which enable partying.

The joy from the vaccines and stimulus news can extend THE top for a couple months due to the momentum, but Q1 will be historic and talked about in business classrooms for decades to come. It is simply a matter of letting the charts completely top out (monthly). The best current guess is a downdraft right now into the new year, the utilities will tell you if it is a serious multi-week selloff that will linger, or, if it is a multi-week selloff that recovers. Then the SPX monthly chart likely wants price to then come up once more say in February/March for THE top. However, considering that we are in the stratosphere, especially because everyone says we are not in the stratosphere, once she rolls over that may be all she wrote for the duration.

The multi-month uber lows in the put/calls are unprecedented and will have an ugly end coming. Stocks would have already topped-out if not for the goofy holiday trading. This light volume choppy indecision could linger a few days but with those 21-day's at their lows in the charts above, the top should be in right now. If not, the top should occur anytime hence, perhaps a 'sell the vaccine and stimulus news' move will occur. S&P futures are up +18 with the VIX down to 21.44 (stocks move inversely to VIX) two hours before the opening bell for the Tuesday trading session in the states. The Fed maintains its jackboots on the throat of volatility to keep stocks elevated and please the wealthy.

The SKEW Index is at record highs matching the highs in late 2019 and during the summer, both periods resulted in stock market tops. Margin interest is at record levels. Wheee! Whooppie! Every day is a par-tay, until it isn't. Stay vigilant. There's a flash crash lurking in that bush over there. See the leaves shaking? 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.