CPC Put/Call Ratio and SPX Daily Charts Signal Top At Hand Due to Rampant Complacency and Developing Neggie D

Traders and investors return to rampant complacency, uber bullishness, euphoria and fearlessness buying any stock with a heartbeat and pumping it to glory. Every day is one big party with King Donnie signing meaningless pieces of paper promising the world a la Neville Chamberlain (WWIII) and Herbert Hoover (Great Depression II). The stock market is a ticking time bomb due to the low put/call ratio verifying the rampant complacency. The VIX has also relaxed to a 17-handle.

Okay, so now that you know a stock market top is at hand any time in the hours and days ahead, what do you do? You try and time the top to take full advantage. The housekeeping includes ditching the longs and bringing on shorts. In past decades, the top would occur typically within 1 to 3 days of the low put/call ratio but over the last couple decades, as the human greed has run off the charts, the top can occur any time within hours to a couple weeks (10 trading days), sometimes a tad more. The February top was tricky in that context as the low put/calls were triggering as equities topped out, but the neggie d called the exact top so no problemmo.

You need universal negative divergence across all chart indicators to call the top, in the chart above, that is the daily time frame. Price makes matching or higher highs so the indicators can be assessed. The histogram, stochastics and money flow are all neggie d wanting to see a spankdown. The stochastics and RSI are also overbot (RSI at 68 close enough to 70) agreeable to a pull back. The MACD line and RSI, however, remain long and strong wanting to see higher highs in price still yet in the dialy time frame.

Thus, stocks may need a jog move (down-up) to get the RSI into negative divergence and then the MACD line will need a jog to do the same. Both may occur together which would be 2 or 3 days or they may occur with the MACD always bringing up the rear, which is typical, that would be 4 to 6 days. If you bring up the 2-hour chart, oh, she is topped-out now with neggie d.

Thus, mathematicians say thus a lot that is why we are not invited to the fun parties, A Million Miles Away, thus, the SPX should be weak today pulling back also with the help of the neggie d indicators above. But, after a couple days, the SPX will come back up to satisfy the long and strong RSI and MACD. You can get a feel for this, right? Just watch the charts and you can call the top in the coming days. Right now is a top, but the daily chart says not quite. Instead, let some sogginess enter stocks for a couple days, then a move back up, and that may be THE top.

Position yourself accordingly. A lot of talking heads are opining about a toppy market that makes you think the upside may squeak out another hundo or more SPX points before she dies. It would be prudent to begin trimming longs and bringing on a couple short positions today before the weekend in case Black Monday makes an appearance. Then, through next week, increase the shorts that will be a nice set-up as equities top-out and die.

Keystone called the February top (red circle) and then told you to wait for the panic and fear before you nibble and buy long and cover the shorts, and that was early April (green circle), and now here we are holding the ticking time bomb again so you know what to do and what to watch. 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.

Happy Armed Forces Day tomorrow to all you vets and families of lost loved ones in the foreign wars. That is a lot of brave men and women. Cher was great at keeping the troops happy and letting them know what they are fighting for. If I Could Turn Back Time. The officers got in trouble for the show but they knew how to lift moral and keep the men motivated.

Note Added 9:55 AM EST: Stocks are open for trading for the Friday session. Let's take a look. On the SPX 2-hour, she is cooked with universal neggie d. If you are a day trader and nimble trader, it is time to short. The SPX daily chart looks the same as explained above although the RSI is flattening. A bigtime top is at hand. Stocks will drop today and perhaps Monday, then recover to current highs again, and at that time the MACD on the daily will be neggie d, joining all the other indicators, say in the middle or end of next week, and you can call the top and then watch equities die. Simply use the 2-hour and daily charts to time the pending top. Build short positions going forward. Everyone is far too bulled-up, euphoric and complacent thinking the stock market goes up forever no matter what; these dummies need to be taught a lesson again since they did not learn the first time.

Note Added 4:20 PM EST: The bulls win the day with the 2-hour chart not yet rolling over. Go figure. Monday it will. This is a weekend that you should have some shorts on especially with the move higher today.

Note Added 4:53 PM EST: Moody's downgrades US debt from AAA to AA1. This is bad news. The US is the world's reserve currency and no longer AAA-rated by any major agency (Fitch and Standard and Poor's already downgraded US debt in 2023 and 2011, respectively). King Donnie will throw a hissy fit. The expectation is for a weak start for stocks on Monday considering the news but the weekend will have to play out. Everyone will be watching Sunday evening futures. The House is unable to move the Trump tax and spending bill out of committee which is supposed to be the easy part. Pause for laughter. Speaker Johnson's job is on the line. He reminds you of Hermey. Remember Hermey? He was the elf that wanted to be a dentist in the Rudolph the Red-Nosed Reindeer Christmas television special. Trying to get politicians to agree is like pulling teeth. Mike probably wishes he was at the dentist instead of dealing with all the prima donna politicians.

Note Added Tuesday Morning, 5/20/25, at 5:11 AM EST: SPX 5963.60. Stocks remain buoyant as the retail crowd is trained to buy any dip forever. CNBC commentator Jim Cramer keeps telling people to buy stocks. That is stupid considering the verifiable and rampant euphoria and complacency in the stock market and the SPX daily chart topping-out with neggie d. Jamie Dimon at JPM said the word 'complacency' word over and over yesterday. He gets it. The SPX daily chart remains the same with the RSI a hair higher and the MACD still higher. These have to negatively diverge to call the top and it should occur any time in the days ahead.