CPC and CPCE Put/Call Ratios Daily Charts; Significant Stock Market Top At Hand; S&P 500 Dumps -2.5% on 2/25/21

The strangeness continues. Stocks have not even started to sell off to any great extent as yet and everyone is announcing the all-clear signal and time to buy, buy, buy! It is comical. These are unprecedented times. Very few may understand how historically significant this period is right now; Q1 2021.

The CPC and CPCE put/call ratios show the long stretch of complacency which is outrageous. It is a flashing neon sign telling you that we are likely peaking out in a major way a la 2000 and 2007. A multi-month top is forming now, right now, or within the next couple months if the easy money can keep pumping. The low put/calls verify the uber complacency and for it to last this long is epic and signaling a significant top. The 21-day MA's have bottomed a nice topping signal for the stock market.

You knew everyone was all 100% in on the long side with the quintuple 5x long tech QQQQQ ETF when Pastor Brown took last Sunday's collection money and bot AAPL stock. Shy, retired librarian Mrs O'Connor took her entire life savings and bot AMZN stock. Timmy Tech can hardly wait for his next paycheck because he plans on buying more stock, but he wants to stay diversified, so he thought it a wise idea to buy both TSLA and FB stock. Cousin Larry said he refuses to play this crazy party game so he withdrew all his money from the stock market and said he wants to play it completely safe, so he can sleep at night, so he put all the dough into bitcoin. The silliness continues. This stuff always ends in tears. 

You cannot nibble on longs until the CPC moves above 1.20 and CPCE moves above 0.80. This will signal fear and panic and folks running for the exits selling their grandmother's ring to cover margin calls, selling anything, selling gold to cover margin. When that fear and panic occurs, that is when you buy, not now. You want to run into the fire and it is not blazing enough as yet.

Cathie Wood said she bot TSLA and bitcoin yesterday. Why? There has not even been much of a selloff yet. You have to wait until you see the whites of their eyes and CPC 1.20 and CPCE 0.80 tells you when to nibble on the long side. Cathie! You need a chart technician!

Wood is not alone in then non-stop bullishness. Bloomberg and CNBC continue parading bulls across the television screens. BTIG Strategist Julian Emanuel is not worried about the markets overheating. Up is the way forward. JPM strategist Bob Michele touts growth ahead and blue skies. JPM strategist David Lebovitz says people are skeptical and you want them to climb a wall of worry. What is he smoking? Look at the charts above. It cannot get anymore simple. The complacency is historic and off the charts. No one, zero people, are skeptical or worried; they are fearless and without worry, complacent, and believe that even if a selloff occurs the Fed or other central banks will pump stocks higher again. Moral hazard.

Nuveen strategist Bob Doll says consumer spending will be unleashed and stocks will have a good year. Doll sees no reason to hedge for the downside. Bridgewater strategist Rebecca Patterson proclaims, "The S&P (500) is not in a bubble."

Bloomberg's Gina Martin Adams is touting banks and higher stock prices ahead. Tom Keene, the television show host, proclaims that Adams is "as bullish as I have ever heard her!" Financial interviewer David Rubenstein says stocks can continue higher and "you only know a bubble when it bursts." Obviously, Rubenstein does not know anything about technicals especially neggie d. Fundstrat founder Tom Lee says we could be at the start of a "generational move" higher for stocks led by energy. Everywhere you look it is one bull after another and anyone opining about a pullback will quickly say buy the dip. Bears are as rare as hen's teeth.

Are there any bears around? Bueller? Anyone? Bears? Bueller? Keystone is one now that Keybot the Quant flips short. Time will tell if the short side holds. The charts tell you to be out of the long side or be playing the short side. Wait until the charts move above the green lines to consider nibbling on the long side since a nice bottom and sustainable rally will be developing then. Be patient. 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.

Note Added 9:35 AM EST: MS strategist Dan Skelly proclaims blue skies ahead with banks rallying. He decrees, "There is more room to go" with "potential for (more) upside." MS's call on the SPX is 3900-4000 where it will hit a ceiling. Other Wall Street strategists are targeting SPX 4200 to 4600. GS strategist Golub proclaims that semi's and banks will send the SPX to 4300, a new target, up from the 4200 prior target. CS strategist Mandy Xu says banks, metals and energy are the place to be. Everybody sing, all together now; Happy Days Are Here Again!.Wheeee! Party time will continue forever like the 1920's.

Note Added 9:40 AM EST: SPX 3875. VIX 24.17. 10-year yield 1.42%.

Note Added 11:19 AM EST: Not one analyst talks about yields coming back down (Treasury note and bond prices up). Everyone believes that yields will march higher with reflation and inflation since the monetary (Fed) and fiscal (Congress) easy money pumps continue sending growth to the moon. It is comical that the people that comment on all this stuff, and analyze, and pontificate, are the upper middle class and elite privileged class neither of which miss a beat, or paycheck, during the pandemic (think perspective). They are asking the huddled masses in America, why so glum? Don't be negative, look, everything is great. Can't you see all the wonderfulness everywhere? There is a disconnect here. The scenario no one is talking about is when yields come back down opposite of what 99% of Wall Street says. Perhaps a deflation and disinflation realization hits if yields come back down since this outcome is completely unexpected. When all confidence is lost in the Federal Reserve, all is lost. Investors and traders may panic realizing that this is the future for weeks and months ahead. No one will stick around for that. Stocks would collapse, a flight to safety sends yields lower, the dollar will move up or sideways, gold will surprise since it will only be sideways with maybe a small rally. Margin calls will be occurring during the stock selloff especially with everyone leveraged long. Shockingly, even Miss Betty revealed, in the nursing home cafeteria yesterday, that she was triple-leveraged long a triple-leveraged ETN. People sometimes ditch gold during a stock market selloff because they use that money to cover margin calls. This is why in a big selloff, gold bugs will sometimes be flustered to not see gold rally that much. Perhaps there is lots of fun ahead as described; not one other analyst describes this outcome. The SPX regains 3.9K now at 3901. VIX 22.70. Bears need VIX above 24.17 or they got nothing. Pope Powell is pumping markets with his dovish words.

Note Added 11:40 AM EST: SPX 3905. VIX 22.61 at LOD. If you lift Pope Powell's pale green robe, he still has his jackboot on the neck of volatility; he is squeezing harder now sending stocks higher. UTIL 828.25.

Note Added 12:38 AM EST: SPX 3919. Pump it Powell, pump it! VIX 22.20. 10-year yield 1.376%. UTIL 826.75.

Note Added Friday Morning, 2/26/21, at 3:03 AM EST: The US stock market retreats on Thursday, 2/25/21. The S&P 500 drops 96 points, -2.5%, to 3829, and was down well over 100 points intraday. The Dow loses 560 points. The Nazzy Comp dumps 479 points a bloody -3.5% loss. The Nazzy 100 plummets -3.6% as tech stocks are thrown overboard. The Russell 2000 collapses -3.7%.