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.
CPCE, today
2014, April
2010, June
