The CPCE falls off the chart to 0.34 at multi-year record lows. The call-buying is crazy high at levels never seen before in history. The uber low put/calls signal complacency and a complete lack of fear in the markets. This is when a stock market top is at hand. Bullish traders that are long the market are maintaining those positions without any thoughts of selling while at the same time playing further upside with call options. Everyone figures there is no need to buy puts for protection since stocks will not go down and if they do the Fed will pump them back up; moral hazard has arrived. Younger traders, exposed and excited about trading during the ongoing coronavirus (COVID-19) pandemic, rush into the stock market in recent months, buying call options, going long ETF's and chasing other bullish instruments. No one is short; everyone is long on quadruple leverage.
Analysts at Goldman Sachs and BMO tell clients to buy, buy, buy, to take advantage of the blue skies and rainbows ahead. Uncle Paul dug up two Maxwell House coffee cans in his backyard and traded in the gold coins for cash and then used all that money to buy AAPL, AMZN and TSLA stock. Paul said he refuses to stand by and miss out on the big party. He bragged to his buddies at the local bar that he would be on easy street in a few months. It's the silly season. Every day is a par-tay.
Get out of the market if you are long and simply watch from the sidelines for the coming weeks. 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.
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