Tuesday, February 9, 2016

SPX S&P 500 5-Minute Chart Support/Resistance Levels

The blue  lines highlight the strongest S/R levels at 1897, 1884, 1878, 1874, 1872, 1848, 1841 and 1808. Note the air pocket between 1872 and 1848 and between 1841 and 1808. The gap down yesterday tests 1848, which fails, so 1841 is quickly tested and price jumps. Thus, price moves higher to back kiss the 1848 for a bounce or die decision, and fails. Price then drops for another test of 1841 support, and fails. The SPX drops to 1834 as the European indexes close at 11:30 AM EST.

Then a recovery occurs after the European close, which is anticipated by traders since this typically occurs each day, but instead of recovering higher, price moves up to test the 1848 R again, and fails. Thus, price collapsed back down to test 1841 S, and that fails, so the bottom falls out. At 2:30 PM, the low prints at 1828.46 (pay attention to this number going forward) in conjunction with the TICK machine printing uber low -1200 and -1400 numbers and the VIX peaking for the day at  27.72. The uber negativity is off the charts so a quick relief rally is needed, which occurs. Price comes up to back kiss 1841 R and pushes higher. The SPX tests the 1848 resistance and pushes up through placing the 1872 resistance on the table and 1848 becomes support to end the day.

S&P futures are down -15 as this is typed about 90 minutes before the Tuesday, 2/9/16, opening bell. The drama around the key and very strong S/R levels at 1848 and 1841 will continue. Use these levels to gauge who is winning and losing. Markets remain very erratic and unpredictable. It is typically best to watch and do less trading in this type of environment.

Typically, when the VIX is above this 25-26 area and higher, if you buy stocks, you are typically correct as the weeks play out. The elevated VIX reflects fear in the markets and buying fear typically works out in your favor. Put/calls are elevated. Reference the previous SPX Support/Resistance missive for S/R levels between the major levels shown above by the blue lines. 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.

Monday, February 8, 2016

BPSPX Bullish Percent Index Daily Chart

In January, the BPSPX prints a six percentage points reversal from 23 to 29 which is a market buy signal and then moves above 30% for a double-whammy market buy signal. Stocks rally. The wine is flowing like water and it looks like the recovery may have legs although oddly, as the BPSPX climbs, stocks keep selling off. Something has to give. The party ends.

From the top at 40 a six point reversal is 34 which occurs for a market sell signal and gives a nod to the market bears. Watch the key 30% level tomorrow as a key market tool. If the BPSPX slides under 30, stocks are in for more carnage for a day or few. The market bulls must prevent the BPSPX from falling under 30 with all their might. If the bulls can move BPSPX up above 37-ish, they will be back in good shape with the double-whammy buy signal back in effect

If the BPSPX slides under 30, more selling will hit the stock market. The bright side for bulls, however, is that when under 30 it is only a matter of time before stocks will set up a base and recover. Note the last time 30 failed, the bottom occurred 3 days later and the BPSPX was back above 30 four days after that. Put the BPSPX 30% level on the top of your watch list for tomorrow and watch it like a hawk since it will tell you a lot. 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.

TICK and NYA NYSE 2-Minute Charts


Markets have gotten hammered on Friday and today. On Friday, concern increased that a Fed rate hike may be coming sooner than expected after the jobs report, however, after today and looking back, the real fear is the banks. Keystone highlighted the trouble in Italian banks one month ago and the problem is festering creating contagion elsewhere. The weakness in European banks cascades to US banks today.

The selling was aggressive today. The TICK machine printed an uber negative -1400 print at 1:45 PM EST. The negativity and market selling is off the charts. Keystone bot index longs after the -1400 print. The expectation is that a rally should begin due to the off-the-charts negativity.

The pink bubble is a -1200 print, again, off the charts negative. As a reference, any TICK under -1000 is an uber low number where a rally will typically begin; this emphasizes how off the charts negative a -1400 print is. The blue circle at -1250, and then the brown circle at -1300 occurs for the exact stock market bottom at 2:30 PM at 9127. Stocks then rally from 9127 to 9263, 36 handles, in about 75 minutes.

The stock market is very erratic. A recovery and relief rally for stocks is dependent on the European banks so turn the computer on at 3 AM EST (8 AM London) in eight hours to see how the financials begin trading across the pond. If the banks stabilize, the stock market will stabilize. 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.

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 2/8/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 2/8/16. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The intraday low in 2015 was 1867.01 on 8/24/15 and intrayear closing low for 2015 was 1867.61 on 8/25/15 so the 1867 level is critically important during 2016. The SPX bounced off this area in January and now has rolled over and will test the 1867-ish support again this morning.

For Monday, 2/8/16, with the SPX starting at 1880, the bulls need to push above 1913 to regain their mojo, a formidable task. The bears need to push the SPX under 1873 to accelerate the downside and this appears on tap with S&P futures down -30Trouble with Italian and other European banks and the collapse in oil prices send stocks lower. Last Friday’s Monthly Jobs Report places the potential for the second Fed rate hike coming sooner rather than later which spooks equity markets. The ECB plans on firing another money bazooka on 3/10/16 but this is one month away.

For the market bears, there is an air-pocket from 1872 down to 1848. The 1867-1868 support is strong (last August and January lows) which may try to make a stand but if the 1867-1872 fails, a move down to the 1848 support is coming. If 1848 fails, 1841 is next and if that fails another huge air-pocket down to 1808 is likely. Looking at the futures, the SPX may want to tag 1848 from the get-go and that will be a critical bounce of die decision.

The market bulls need the SPX to overtake the 1884 resistance since this will send price to 1897 and a move up through 1897 will send price to 1924. This is interesting since rallies in bear markets can be sharp and strong and these three key resistance levels are a 40-point move. The bears, however, remain in control so the 1878, 1874, 1872 and 1848 support levels are key as the week begins.

Looking at the near-term picture the strongest S/R is 1961, 1951, 1942-1943, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808, 1803 and 1800. Note the air pockets between 1872 and 1848 and between 1841 and 1808.

The new moon peaks eight minutes after the opening bell a very odd metaphysical occurrence. Stocks are typically weak moving into and through the new moon each month and that occurred in spades on Friday into the peak new moon less than one hour away.

Note: If the list below displays any blank spaces, view it in a different browser.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
2131 (5/21/15 All-Time Closing High: 2130.82)
2130 (6/22/15 Intraday High 2129.87)
2129
2128 (7/20/15 Closing High: 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 Closing High: 2124.20)
2123
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2114
2110
2109
2104
2103
2102
2100
2099
2097
2094 (12/29/14 Intraday High: 2093.55)
2093
2091 (12/29/14 Closing High: 2090.57)
2089
2086
2084
2081
2080
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2063
2061
2058
2056 (11/18/14 Intraday High: 2056.08)
2053
2052.98 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2050
2046.17 (50-week MA)
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2043.94 Trading for 2016 Begins Here
2042
2040.81 (200-day MA)
2040
2038
2034
2032
2030
2028.66 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2024.71 (20-month MA)
2023
2022
2019.59 (150-day MA; the Slope is a Keystone Cyclical Signal)
2019.06 (10-month MA)
2019 (9/19/14 Intraday High: 2019.26)
2017
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2008.69 (100-week MA)
2007 (9/5/14 Closing High: 2007.71)
2006.71 (100-day MA)
2006.54 (20-week MA)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
2002
1998
1997
1995
1993 (1/15/15 Closing Low: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1990.84 (50-day MA)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1983
1982
1981 (2/2/15 Intraday Low: 1980.90)
1980
1979
1978
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1961
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1949
1948
1947.20 Previous Week’s High
1943
1942
1940.24 February Begins Here
1937
1936
1931
1928
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1914
1913.07 Friday HOD
1912
1910.34 (150-week MA)
1910
1906
1902.05 (20-day MA)
1902 (5/13/14 Intraday Top: 1902.17)
1901
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)
1889
1886
1885
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1880.05 Friday Close – Monday Starts Here
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872.65 Friday LOD
1872.23 Previous Week’s Low
1872
1870
1868 (8/25/15 Closing Low: 1867.61)
1867 (8/24/15 Intraday Low: 1867.01)
1865
1862
1859
1855
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1846
1845
1843
1841
1840
1839
1835
1831
1828
1827
1824
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52)
1809 (12/9/13 Closing Top: 1808.37)
1808
1807 (11/27/13 Closing Top: 1807.23)
1806
1803
1801
1800
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)
1796
1793
1791
1788
1787.69 (200-week MA)
1785
1783
1782
1781
1777
1775 (10/30/13 Intraday Top: 1775.22)
1772 (10/29/13 Closing Top: 1771.95)
1770
1768
1764.84 (50-month MA)
1763
1762
1759
1756
1752
1748
1747
1745
1740
1737
1733 (10/17/13 and 1018/13 Gap-Up: 1733.15-1736.72)
1730 (9/19/13 Intraday Top: 1729.86)
1726 (9/18/13 Closing Top: 1725.52)
1722
1720
1711
1710 (8/2/13 Intraday Top: 1709.67)
1709
1708
1706
1703
1700
1698
1697

Friday, February 5, 2016

Keystone's Midday Market Action; US Monthly Jobs Report

The circus comes to town once each month. Here is this morning's set-up and results after the Monthly Jobs Report;


The tension increases ahead of the jobs number. The consensus for the Monthly Jobs Report is 188K jobs. Last month was the robust 292K jobs. Revisions are important. The unemployment rate is expected to remain flat at 5.0%.

The consensus for the Average Hourly Earnings is +0.3% compared to last month’s 0.0%. Inflation, that the Federal Reserve has attempted to create for the last seven years with their obscene Keynesian spending, cannot exist without wage inflation. The wage data is more important than the headline jobs number and rate. Since the Fed has begun a rate hike cycle, Chair Yellen desperately wants to see wages increasing and will want the wage data to meet the +0.3% estimate and more. If wages remain weak, Yellen will have to ‘take a powder’ to collect herself. Wages are expected to rise due to minimum wage raises.

Minutes before the data, the S&P futures are down -2. Dow -5. Nasdaq flat. WTIC oil 32.03. Brent oil 34.80. Natty 2.045. Gold 1160. Silver 14.92. Copper 2.123. DAX -0.5%. CAC +0.2%. FTSE +0.1%.

Euro 1.1211. Euro/yen 130.78. Dollar/yen 116.65. Pound 1.4553. Mexican peso 18.2009. Canadian dollar 1.3746. Dollar/yuan 6.5724.

Treasury yields are; 2-year 0.70%, 5-year 1.22%, 10-year 1.84%, 30-year 2.69%. The 2-10 spread is 114 bips.

At 8:30 AM EST (1:30 PM London; 2:30 PM Frankfurt; 10:30 PM Tokyo), the Monthly Jobs Report is 151K jobs. The unemployment rate is under 5.0% to 4.9% the lowest since February 2008. November jobs are revised up 28K from 252K to 280K and December’s blowout number is revised lower by 30K from 292K down to 262K. The two months of revisions net a 2K job gain. Private sector jobs are up 158K. The retail sector gains 58K jobs, food service 47K, healthcare jobs gain 37K and manufacturing gains 29K jobs. Education and transportation jobs are slashed. Sadly, 105K of the 151K jobs reported are minimum wage jobs.

The Average Hourly Earnings are up +0.5% versus the +0.3% consensus and 0.0% last month. Wages are up +2.5% annually. The labor participation rate is 62.7% as compared to last month’s 62.6% now up for two consecutive months. The U-6 rate is unchanged at 9.9%. The average workweek is up +0.1 to 34.6 hours versus the consensus expectation and prior month’s number at 34.5 hours.

Fed Chair Yellen will breathe a sigh of relief since the unemployment rate is under 5%, the labor participation rate increases and wages are rising. The four-hike rate path for this year is back on the table. Equities sell off hard on the results. The S&P’s drop 10 handles. Traders realize the potential March hike is back in play and hit the sell button.

Humorously, the jobs number may have created more confusion than clarity for markets. The headline jobs at 151K is a miss hinting at a sluggish economy but wages are increasing indicating a robust economy. Drilling down, wages were expected to jump higher due to seasonality factors and many large companies increasing minimum wage rates for employees. Thus, those not impressed with the economy, Yellen, the Fed and the stock market will proclaim that wages only rise due to the minimum wage increases while market and Federal Reserve cheerleaders will shout to the masses that the economy is recovering since companies are raising wages.

Futures react wildly to the down side. Three minutes after the data release, S&P -8. Dow -48. Nasdaq -19. DAX -0.9%. CAC -0.2%. FTSE -0.1%. Europe follows the US lower. US 10-year yield 1.839%. Euro 1.1207. Dollar/yen 116.61. Pound 1.4537. USD 96.54.

WTIC oil is flat at 31.70. Brent oil is up +0.3% at 34.55. The US Trade Deficit is up +2.7% to $43.4 billion in December.

At 8:36 AM, S&P -7. Dow -45. Nasdaq -21. WTIC 31.81. Brent 34.62. Euro 1.1199.

At 8:39 AM, S&P -8. Dow -55. Nasdaq -17. WTIC 31.77. Brent 34.57. Euro 1.1176. Gold 1158. Silver 14.89. Copper 2.113. The  market reaction to the jobs report is subdued.

Treasury yields are; 2-year 0.73%, 5-year 1.25%, 10-year 1.86%, 30-year 2.706%. German bund 0.309%. Japan 10-year yield 0.035%. WTIC 31.60. Brent 34.40.

S&P -5. Dow -27. Nasdaq -9. Euro 1.1135.

At 9:30 AM EST, US markets begin trading gapping lower. Equities take on a weaker profile than the futures indicate. Data companies are crushed after Tableau’s weak results. DATA crashes -50%. SPLK -15%. QLIK -14%. LNKD -33%. Over $10 billion in LinkedIn’s market cap disappears in a heartbeat. CRM -7.3%. The tech sector is pounded with XLK down -1.1%. Democratic presidential candidate Hillary Clinton put JCI and VRX on notice during last evening’s debate and the stocks drop -0.4% and -0.2%, respectively.

Energy stocks are bludgeoned. XLE -2%. HES -10%. DVN -6.1%. MRO -5%. CHK -5.3%. MUR -4.1%. HBI collapses -10%; long underwear sales are weak due to the unseasonably warm winter. Steel giant MT collapses -8%. CMI -1%. Financials and consumer staples are marginally higher. Utilities tank. XLU -1.4%.

The S&P 500 is down 11 points, Dow down 56 points and Nasdaq down 33 points. WTIC oil is down -1.8% to 31.15. Brent oil is down -1.3% to 34.03. Weaker oil prices drag the stock market lower as  usual. Natty 2.027. Gold 1148. Silver 14.72. Copper 2.095.

At 9:48 AM, the SPX is down 17 points, -0.9% to 1898 and dropping. The Dow Industrials are down 95 points, -0.6%, to 16321. The Nasdaq is down 59 points, -1.3%, to 4452. The Russell 2000 small caps are down 11 points, -1.1%, to 1004. VIX 22.71. TRAN -0.7%. Euro 1.116. USD 96.96. WTIC oil 31.07. Brent oil 33.94.

Treasury yields are; 2-year 0.73%, 5-year 1.26%, 10-year 1.87%, 30-year 2.71%. German bund 0.309%. Japan 10-year yield 0.029%. Gold 1149.


At 10:07 AM, stocks attempt to stabilize. The SPX is down 11 points, Dow down 50 points and Nasdaq down 53 points. VIX 22.09. Trannies are positive; TRAN +0.2%. USD 97.20. The dollar is strengthening and yields floating higher so market participants believe the likelihood of a second Fed rate hike increases. Thus, pressure remains on equities.

As always, follow all daily market events with Keystone the Scribe.

Tuesday, February 2, 2016

SPX S&P 500 2-Hour Chart Potential Inverted H&S Upward-Sloping Channel

Markets continue along on a tortuous choppy path. Large point swings occur intraday and day to day due to the elevated volatility. The VIX dropped under 20 last Friday during the big rally and today spiked above 22 during the big selloff. Saw tooth markets like this are best watched from a distance with minimal trading since this behavior chews up bulls and bears alike.

The inverted H&S pattern remains in play shown by the black lines. The target is 1990-2000 for the inverted head and shoulders pattern after the neck line at 1905-1910 was violated to the upside. A back kiss would be expected and stocks are slapped across the face today falling back to the neck line for the back test. Tomorrow is critical, price will bounce or die from this level. A bounce and price will set its sights on the 1940 area again and then the higher target and gap fill. Failure from here and price will seek 1890 support then 1875.

The blue channel is in play; price is at the bottom rail of the channel and will make a bounce or die decision either to stay inside the channel or collapse lower to the 1890 and 1875 support levels. The prior price support where the two right shoulders are is 1875-ish. The indicators are not tipping their hand to any great extent; there are mixed signals. The indicators are weak and bleak except for the RSI that would like a little one candlestick bounce, but then some further softness in price should occur in this 2-hour time frame. Direction is a difficult call since it depends on oil prices. If oil decides to rally tomorrow then stocks will rally.

Price topped out five candlesticks ago but the MACD line was still long and strong wanting a higher high in price. The RSI never reached overbot territory. The collapse in oil prices have sent the stock market down the rabbit hole to begin the new week of trading; tomorrow is an important day. 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.

OVX Oil Volatility and WTIC West Texas Intermediate Crude Oil Weekly Charts


Oil is bludgeoned mercilessly over the last two days smacked back down to a 29-handle. A global economic slowdown, weak China manufacturing data, robust inventories and oil producing nations pumping oil at record rates are sending prices lower again. The bearish sentiment is rampant. Remember the bearish sentiment a couple weeks ago at that bottom in price? Sentiment was very bearish then and it is more bearish now. Punidts are parading across television and computer screens every five minutes one calling for a lower target than the next. Comically, the consensus now is that oil will be in the teens any day.

The taxi cab driver is all-in on the short side with oil. He said the guys on television told him oil is going under 20. Aunt Agnes, a jovial blue-haired soul in a dress that could double as curtains, took her entire life savings and went short oil because the nice young man on tv said it was guaranteed that oil would move lower.

You know what happens when the boat is fully loaded to the one side. Oil volatility, OVX, is worth a look. The levels of rampant fear are confirmed with the elevated volatility numbers. The green circles show where negativity is off the charts, everyone is wringing their hands convinced that oil is about to completely collapse to near zero, exactly when it actually rallies. What do you think will happen to oil as the negative news and proclamations that oil in the teen's is quickly on the way? As a rule of thumb from the OVX chart above, bottoms in oil occur when OVX volatility is at or above 65. 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.

Sunday, January 31, 2016

CL Crude Oil Commitments of Futures Traders COT Weekly Chart and USO OIl Fund Daily Chart


The oil COT chart was highlighted a couple weeks ago and the comment at the time was that the close proximity of the blue and red bars towards the centerline, the most squeezed in for a long time, indicated a bottom in oil. In addition, the prior two key lows in March and August occurred with bars squeezed in towards the centerline of the chart.

So a bounce occurs in price and the bars expand outwards which occurs during a rally in price. The daily chart shows the universal positive divergence across all indicators, as well as oversold conditions and the falling wedge behavior, that created the launch in price. The USO oil price is well below the moving averages so a mean reversion higher is needed.

Oil should rally higher in price until the COT bars print inside the red circle. Does it happen this week or one month from now? There is a cluster of resistance formed during December at the 11-ish area for USO. Oil prices are expected to float higher unless a negative news event occurs to collapse prices lower such as Iran ramping up production or Russia refusing to curtail production. 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:  The COT chart is provided by Cot Price Charts a very useful and informative site and the chart is annotated by Keystone.

Note Added 8:24 PM EST on Monday evening, 2/1/16: WTIC oil crashes -7% today down to the 31.32 level. Price is taking a rest from the launch from under 27 to 34 over the last two weeks. More oil volatility is expected. The weakness in the China PMI took wind out of oil's sails as well as the OPEC, Non-OPEC nations and Russia not wanting to cut production rates. Oil is trading emotionally off the news bites.

WTIC West Texas Intermediate Crude Oil Weekly Chart

Keystone highlighted the falling wedge, oversold conditions and positive divergence (green lines) expecting a possie d launch, which occurs with oil price jumping from 26 to 34 over the last couple weeks. The stochatics are long and strong hinting at a higher high for price after any pull back occurs. Watch for the MACD positive cross (green and red lines) which would indicate higher oil prices ahead.

The lower standard deviation band violation was highlighted a couple weeks ago and price bounces with a target of the middle band at 40.46 and falling on the table. Price will likely want to kiss the middle band which would be expected anytime over the next couple-three weeks at the 36-41 range.

So the expectation is for more buoyancy in oil prices but it is dependent on the news flow as evidenced last week. Oil prices jumped on news of a potential meeting with the OPEC, non-OPEC nations and Russia that were to agree on a 5% oil production cut. Oil prices soared higher. Then Iran and Russia threw a wet blanket on that news so oil prices relaxed.

Today, Sunday, the Saudi's are back at it talking about the need for cooperation among oil producers to lower oil production. If a meeting and production cut occurs from the oil producers the WTIC price will likely jump to tag that middle standard deviation band in a heartbeat. 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.

CPCE Put/Call Ratio and SPX Daily Charts Signal Near-Term Market Top at Hand


Traders remain relaxed and complacent despite the market turmoil. The CPCE is down at 0.58 where a market top would be expected to occur at anytime any day forward. The CPC put/call ratio is not yet down to a comparable low like the CPCE above so that may hint that a couple more days are needed before the market top is in place.

The saw tooth action over the last two weeks is creating confusion in the numbers. In late December the CPCE was at a low with complacency. A market selloff occurs as forecasted but the put/call immediately catapults to the 1.20 number indicating rampant fear and panic and a market bottom, which occurs. The put/call then drops into complacency creating the top and steep drop off starting during the last couple days of last year. The CPCE is now down to the similar levels as the late December stock market top. A lot of the put/call activity is noise nowadays due to the high volatility creating the large-point whipsaw action.

Thus, if you are bullish the market, temper your enthusiasm and be more tactical and cautious during the week ahead. A short position against the market for a near-term trade could be considered with a scale-in to the short side taking place during the week ahead. Check the CPCE and CPC put/call ratio's on Monday evening. If the CPCE drops under that thick red line the market top is here so it would be extremely important to have downside protection in place immediately. 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 8:29 PM on Monday, 2/1/16: The CPCE created a strong spank down at the opening bell this morning. The Dow was down 166 points. Stocks rally intraday, however, and the CPCE ends at 0.63. CPC is 1.02 in the middle area no man's land. Both put/call ratio's are going to need to move lower to signal a near-term top; there is not enough complacency in place. Thus, the market bulls may create buoyancy in stocks for a day or three.