CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts; Rampant Panic and Fear Signals Time to Nibble/Buy On Long Side

The bulls and the bears are the yin and the yang of the stock market and the pendulum swings back and forth. Keystone posted the CPC and CPCE put/call ratio charts leading up into the stock market top in February. One of the key giveaways that the US stock market was at a bubble top was the rampant complacency and fearlessness.

Everyday was a bullish orgy of traders buying anything with a heartbeat without fear that stocks will ever go down again. The euphoric optimism was off the charts (low put/calls) further proven by the parade of bullish calls on television and the internet and any bear, if you could find one, would opine fear, but then would be buying stocks 10 minutes later (obviously, not fearful).

That was then and this is now. What did Keystone tell you? Only a few of you remember. That is not good. The rest of you need to put those bongs down. He told you that you have to wait for panic and fear to arrive before you want to nibble on the long side and start to bring on long positions. Honey, we're home.

The snap-back rally in stocks today petered out once King Donnie, King Crybaby, said the 104% tariffs against communist China would proceed tonight at midnight. Stocks gave up the rally and went negative but closed off the lows. It is crazy price action, like you are living in a Cartoon. Time to plug in. 'Look around you'll see, it's a mountain made of sand under me, you're in the movies and I'm in your cartoon'.

S&P futures are down -80 points as this post is typed so traders are clenching their buttocks waiting to see what happens in the final hours. This is the Donnie Trump reality television show Season 2. This is what everyone wants.

The relief rally would have likely stuck today if the China tariff drama was not in play. If futures are down -80, no, check that, now -88 points, perhaps that is about the extent of it. Maybe not since it dropped 8 points in a heartbeat over the last minute. It does not matter. Panic and fear is rampant so it is best to buy shares off the people running from the exchange with their hair on fire.

The China drama likely depends on when the further escalation is announced by the communists. They likely want to tone down the speed of the drama so China may wait for tomorrow or the following day to announce the retaliation plan. If so, stocks should recover tomorrow since all that information is known/expected. If China announces retaliation tonight, minutes after midnight, futures may tank because Xi and Trump will be fighting a cage match of uncertainty.

Anyhoo, putting the baby politics aside, the high put/calls means it is time to take that list of potential longs on your wish list, that you researched the numbers on and studied the charts, and start nibbling for the relief rally. Stocks have collapsed a long way and simply need to recover to catch their breath. The full moon peaks on Saturday and stocks are typically bullish moving through the full moon.

The green circles show key bottoms in the stock market created due to panic and fear. Fancy that. The peaks in panic and fear correspond to the key bottoms when party-time for the bulls will begin again. Tell David Lee to bring in the California Girls. Keystone exited all index shorts on Friday and is now bringing on index longs. 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 8:35 PM EST: S&P futures are down -88 as everyone is gathered in the pumpkin patch next to the Rose Garden, waiting for the orange head to appear and belch words of wisdom about the China tariff fiasco.

Note Added Wednesday Morning, 4/9/25, at 3:31 AM EST: The S&P futures tanked down -140 points overnight but over the last couple hours come the whole way back to flat. Donnie Trump's Trade and Tariff War continues with the 104% tariff applied to China. So far, the communists have not responded with their retaliation plan. 

Note Added Wednesday Evening, 4/9/25: The SPX starts the day soggy dropping to 4835, then King Donnie balks with his trade and tariff war placing the drama on hold for 90 days, so the S&P 500 catapults higher to 5457.