CPCE CBOE Put/Call Ratio Daily Chart; Rampant Stock Market Complacency, Fearlessness and Ecstatic Euphoria Identifies Pending Top as SPX Prints All-Time Historic High at 5878

The SPX (S&P 500; United States Stock Market) prints a new all-time high last Thursday, 10/17/24, at 5878. Happy Days Are Here Again.

The stock market euphoria is, literally, off the charts as shown above. The CPCE put/call ratio is down to 0.42 at multi-year lows verifying the rampant complacency, euphoria and blatant fearlessness. It is a stock market top. Pride always cometh before a fall.

The stock market complacency was rampant in 2021 with stocks rallying to the stratosphere all year long. The low points in the chart above in 2021 correspond to peaks in the SPX all the way into the late 2021 stock market top. As 2022 started, the SPX dropped -1200 points into the October 2022 low. On average, that is a drop of about -135 SPX points each month for 9 straight months.

When the stock market initially fell to kick-off 2022 on a sour note, the SPX dumped about 600 points in a couple months, then recovered 400 points into the April 2022 top identified by the red circle. From there, the downside continued into the October 2022 low dumping about a 1000 points.

The July 2023 rampant complacency above identified the stock market top where the SPX then dropped about 400 points into the October 2023 low. The expectation for the pending dump due to rampant trader optimism and euphoria would be -400 points minimum and perhaps another -1200 point plunge over the coming weeks and few months.

There is strong price support at SPX 5200-ish so it is reasonable to expect a -600 or -700 point drop in the S&P 500 over the coming weeks. The SPX has topped-out due to negative divergence in the hourly, daily and weekly time frames so the week ahead is key to see if the multi-week path of misery, agony and pain commences in a big way. Maybe a Black Monday? I've been for a walk on a Fall day. The beautiful scenic colorful hills of the Laurel Mountains of southwestern Pennsylvania this morning are spectacular and right now no one is California Dreamin', but give it a few 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.