CPC and CPCE Put/Call Ratios Daily Charts; Rampant Complacency Continues Despite Stock Market Pullback Thus Far

Wheeee! Whoopie!  The stock market is down for a couple weeks but the bulls do not care. The party continues uninterrupted. That piddly selloff did not even take out the January lows. Everyone remains in the fearless mode with rampant complacency the rule for 2025 thus far. No one is worried that stocks will go down. They go up forever, right? Traders are standing around with fistfuls of cash waiting to buy even the slightest dip. The put/call ratio charts have not changed much since posted a couple weeks ago. There should be lots more selling ahead in the stock market since there is no panic and fear on display yet.

Market participants are a lot smarter nowadays with the internet and are on to the game to buy on the bad news. When King Donnie, the man-child, melted down in the Oval Office on Friday, stocks dropped like rocks. Equities fell as the orange head turned into a red-faced head embarrassing himself in front of the world. Little Donnie was hiding yesterday licking his wounds, and today, but he will put his big boy pants on and be ready to bloviate again on Monday.

How do you like a host that invites you over to their new white house at the end of the cul-de-sac and when you get there, he berates and hassles you? That shameful Oval Office debacle news likely has more legs into the new week ahead and it will drown out some of the major speech by Donnie on Tuesday night. The orange head wanted the Ukraine agreement to wave that in the air on Tuesday but now he has buptkis. Who plans on wasting a couple hours of their time to watch that dribble on Tuesday evening? Raise your hand so we can see who the idiots are. That is 2 hours of your life you will never get back.

Anyhoo, stocks drop on the Donnie made-for-television Whitehouse drama but then explode to the upside with a huge rally so obscene it would make Caligula blush. People know to buy bad news events nowadays. A key example is wars. When the bombs start dropping and the tracers are lighting the sky, and stocks collapse, buy that horrible news because in a few months you will be happy. Humorously, if the war does not go right, it will not matter, right?

The prior put/call ratio charts helped call the top in the stock market especially since that complacency jived with the negative divergences on the charts. The funny thing is how no one is fearful. The selling over the last two weeks is met with a yawn and a scratch of the buttocks. No one believes that stocks can ever go down again. These folks need a comeuppance.

Well, now stocks are really going to have to be taught a lesson. The stock market is a prize fighter that just got punched in the head a few times. He is a bit dizzy and the one eye is bleeding so his vision is a touch fuzzy, and he feels his legs and knees wobbly, and he is out of breath, but he wants to stay in the fight, let me at 'em, let me at 'em. The other fighter, the put/call champion, knows he already won, and as the stock market gets up again, and refuses to stay down, well, you asked for it, there is no choice but to smack it hard and send it way down so it can finally be taught a lesson.

Some sentiment indicators show people professing bullishness but never believe a human's lying pie-hole, believe what they do, and the put/calls show you that. People may say they are worried and bearish but 10 minutes later they are buying stocks. That is bullish not bearish.

Shorting the rallies is prudent. You should not nibble on any longs or consider jumping into a long position until the put/calls print inside the green circles. That is when everyone's hair is on fire and you can get shares on the cheap. You want to run towards the burning building not away from it like all the people losing their shirts. Good luck. The last of the New York Dolls died; that's a shame. They are one of the early punk rock bands that used to play at CBGB's. Babylon. 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.

SOX Semiconductors Weekly Chart; Sideways Symmetrical Triangle; Tight Bands

At the end of last year, Keystone posted the SOX chart with the sideways symmetrical triangle. The breakout direction was not known but it appears price is dying. Here is the prior chart if you want to read that first then continue with the saga below.

The purple arrows show tight bands. No, not a tight band, say, like the Allman Brothers with Dickey playing and singing Ramblin' Man. Everyone had a Fu Manchu mustache back then. Pass the bowl, grab your guitar, and play all day, 'cause Dickey holds court, and shows the way. No, not that kind of tight band. Tight standard deviation bands. They are not as sexy and do no make the girls get up and shake their money-makers, but they do tell you that a big move in price is at hand. Tight bands, however, do not predict direction.

SOX appears committed to the downside but let the week ahead play out because if she reverses and wants to rocket launch higher, a la the tight bands, it would have to begin in the days ahead. Otherwise, the downside collapse continues with a long ways down still to come.

The other wild card is if Emperor Jensen or some other AI carnie barker proclaims a breakthrough with chip technology. Or perhaps positive news with the tariff drama. The knife cuts both ways. Negative news in the chip sector will crush SOX to fulfill the sideways symmetrical triangle pattern to the downside.

If you reviewed the prior post for the socks, the same triangle is placed above and you can see that price fails out the bottom. Note the fake-out move higher as the year started but that was a sucka's rally and those poor saps are still clutching their semiconductor shares, along with their pearls, hoping that price will come up again. That is funny.

Using the vertical side of the triangle that is one touch in, is about 1400 points. Let's say the breakdown starts at 5200 so taking 1400 away targets 3800. Well, isn't that special, as the Church Lady would say. Because the 3800 level was talked about in the prior post and that is where the gap fill is needed (orange circle). The 4350-ish level is strong price support. Price violated the lower band so the middle band at 5084 is on the table; it should curl over and begin tracking lower.

The bulls do not want to give up the chip ship. They want to keep sailing the turbulent stock market waters and cannot believe that chips will falter. Semi's are the future. People cannot get enough semiconductors. They believe in the big bull story going forward. All that is fine and cool. But that does not mean the stocks are grossly overpriced, right? In other words, all that fun stuff for a few years ahead with chips is already in the price of the chip stocks. Is it? Keystone is not in the chip space long or short currently. 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.