CPC CBOE Put/Call Ratio; Rampant Complacency and Fearlessness in Markets Continues

The party rages on in Party Town. Merry Christmas. For the CPC put/call ratio, the green circles show panic and fear in the stock market the best time to nibble on longs and accumulate stock for a coming rally. Novice traders and others that are losing their shirt will panic and swear they will never own stock again and they want to ditch all their shares; the green circles are when you buy the shares off of those sucka's.

Conversely, the red circles show the stock market tops. The human greed is at fevers pitch. The stock market is a euphoric buying orgy that appears unstoppable. With every long trade you bring on, or add to, you receive a complimentary tulip bulb from Irving Fisher proclaiming that the SPX is at a permanently-high plateau. Of course, when traders are off-the-charts bullish willing to buy stocks at any price, like now, it is a top and there is trouble ahead.

The 1.20-ish level is typically when you know the selling has gone too far and a rally is set to begin. The 0.80-ish level is typically when you know the buying is overly euphoric and traders are too complacent and a selloff is set to begin.

What do you notice in the chart that is glaring? All the red and green circles are consistent except for the two light green circles on the righthand side. Do you know what that means? Yes, people are buying stocks purely due to euphoric greed and rampant complacency. You want the panic and fear to play out so a tradeable bottom is provided but traders are so anxious to buy any tiny pullback, that they rush in throwing money around like confetti. Everyone is worried they are missing out on the big rally forward. It looks and smells a lot like 1999 as we went into the dotcom bubble top. It would be fitting since the AI hype has created the big market rally over the last year like the tech stocks in the late 90's.

You do not want to nibble on long positions until the CPC moves higher at least above September's high. Traders remain too complacent so they will need taught a bigger lesson going forward. Some people you just can't reach, well, that is the way you want it, so that is the way you will get it. Cool Hand Luke. Christmas is for children and the kids like to hear Frosty the Snowman. 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 Christmas Day, 12/25/24: Merry Christmas. The stock market enjoys a late-session upside orgy on Christmas Eve as the bulls pump the banks and the Fed maintains its jackboot on the neck of volatility. The greed and off-the-charts complacency increases even Santa is triple-leveraged long. Be careful in the minefield. Don't ya know, boy, pressure's gonna drop on you. "Pressure Drop" by Toots and the Maytals.

Note Added Friday, 12/27/24, at 4:23 PM EST: Stocks receive a minor pressure drop today. The SPX drops to 5970.84 but no real damage occurs. The 50-day MA is 5940 and price came down to 5932 to test the support and bounced. The SPX will likely test again so watch the 5932-5940 support level like a hawk since trouble occurs below. The S&P 500 is at 5971 with 2 trading days remaining in 2024 and the new moon peaking for the month on Monday.