The US stock market remains at a historic top but refuses to relent. The holiday cheer, ongoing AI hype and rate-cut talk start 2026 with the SPX printing a new all-time record high at 6978.36, call it 6978, and an all-time closing high at 6966.28, call it 6966, both on Friday 1/9/26. Can't Believe We're Here. The New Year's party continues. However, it is the same story in recent weeks and months.
The bullish euphoria and rampant complacency and fearlessness is verified by the low put/calls; the CPC now down to 0.75. No one believes that stocks can ever go down again. The top is at hand in the days ahead. The Uber driver, shoeshine boy, doorman, and programmer that just got laid off that is still wearing a fleece vest with the company logo, all went triple-leveraged long (3x) placing their entire paychecks into the stock market because it always goes up.
The SPX is in the 5th month of the 6500-7000 range. That is about 7% so that has been the big fight through choppy slop for almost 5 months. Doesn't it feel like stocks are up a lot further? It is up, down, up, down, up......... and next, down. Plan accordingly. Everyone is too bullish and overconfident; the boat is loaded to one side.
The green circles show the bottoms in stocks and the red circles show the tops. For many years, the 1.20 signals the bottoms and about 0.80 signaled the tops. The lower range moves lower in recent years so it is more like 0.75, where price is right now, ringing the bell. Note that the last legitimate bottom in stocks over the last year is the April bottom. People panicked running from the burning stock market so that is when you took their shares off their hands in an accumulation phase. Now you are in a distribution phase.
The CPC tagged 1.12 at the end of 2025 helping the bulls keep stocks joyous into the new year but there was never any panic or fear created. The complacency has been signaling an important and likely major top since the Fall but Emperor Jensen runs to a camera and says, "buy chips," and the crowd goes wild. This top and the economic times currently are a special breed.
The stick of dynamite that is about to blow gets a bit longer; maybe that means when she blows it will be a bigger blast? Everyone in the stock market is bullish. Further, as human nature dictates, they also believe that there will be time to get out if stocks should happen to sell off, but they do not think this will happen anyway. Can you imagine the level of panic and fear that can develop when stocks start moving south? Talk about momentum. Everyone would run for the exit at once. It will be fun.
There has not been a true 'Black" day yet. October was a very good candidate but the AI hype and rate-cut excitement carried the month. There have been a few mini-black days but no biggie yet and that would most definitely remain on the table more so now with the put/calls collapsing again. It is the second full week of trading on tap so everyone is back on the trading floor now ready for the festivities to begin.
Watch your wallet. If you are new to trading, get out and sit in cash for a couple months and simply watch the market and see what happens, otherwise, you are jumping into a buzzsaw and will receive your head on a platter.
Utilities failed last week but the bulls saved the day. As per the Keybot the Quant algorithm, if UTIL, or DJU, lose 1063, the stock market is in serious trouble. If the VIX then spikes above 16.89 it is lights out; the Wall Street blood and carnage will begin. Bulls simply need to keep both metrics in their camp. The Supreme Court tariff decision, bank earnings, inflation data, Fed Speak, and of course ongoing AI hype will move markets this week. 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.
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