The 20d moving average of the CPCE indicator — CBOE Options Equity Put / Call Ratio — hit the lowest reading ever today — 0.43. This level of complacency is unprecedented. At the same time, the daily CPCE finished at 0.35. I decided to analyze other similar instances where the 20d MA of the CPCE indicator would be below 0.5, while the daily reading would be below 0.4.
I was able to identify only two other similar periods: April 2010 and June 2014. In both cases, the market struggled to advance much higher during the next several months. Eventually, however, market went to record new higher highs.