Jeff Clark's Market Minute

You MUST Follow this Signal

The CBOE Put/Call ratio continues to be one of the most effective short-term timing indicators for the stock market.

The CPC is a short-term, contrary indicator. It compares the action in call options to the action in put options. A reading above 1.20 shows extreme bearishness among speculators and can indicate a good time to buy stocks for the short term. A reading below 0.80 shows extreme bullishness and could indicate a good time to sell.

And, as you can see from the following chart, this indicator has been “spot-on” at signaling short-term reversals in the broad stock market…

We’ve had multiple CPC “sell signals” over the past few months – as indicated by the red arrows on the chart. In every case, the S&P 500 sold off within one or two days afterwards. Most of the pullbacks were shallow – ranging between about 20 and 50 S&P points.

That is the nature of short-term signals. But they can still produce profitable trades for nimble traders.

Recommended Link

Available Now: New Retirement Blueprint from America’s Most Trusted Options Trader

For the past 36 years, I’ve helped people retire wealthy… But I haven’t done it the usual way.

I use options.

Now, I know this probably seems risky. Reckless, even.

But my options strategy is different – unlike anything you’ve probably seen before.

It helped me retire at 42. And thousands of others have used it to make $10,000… $100,000… even $1 million or more – in some rare cases.

Which is why I’m offering my never-before-released blueprint… and a year of my guidance… for just $19.

The most recent sell signal came in early May, just before the China trade war fears ignited last week.

Buy signals have been much less frequent this year. That’s not a surprise. The CPC indicates potential reversals in the market. And over the past few months, there haven’t been any decline phases to reverse… until last week.

The CPC closed at 1.28 on Thursday. That’s above the 1.20 level that indicates extreme pessimism. And, from a contrary perspective, that’s a buy signal.

Given this condition – and given the remarkable track record of this short-term indicator – it shouldn’t be any surprise that the stock market reversed Friday’s opening losses and closed higher the day. Traders who were watching this indicator should have been looking to buy into Friday’s decline.

The CPC is still at elevated levels – closing Friday at 1.24. That, plus the new Volatility Index (VIX) buy signal that triggered on Friday , should lead to some bullish action in the stock market early this week.

Don’t get too comfortable on the long side, though. The stock market suffered significant technical damage last week. There’s a good chance the intermediate-term trend has shifted from bullish to bearish, and that stocks will be lower several months from now than where they are today.

For the very short term, though, the CPC indicator is bullish.

Best regards and good trading,

Jeff Clark

P.S. When the S&P fell as much as 2.5% this week, how did you trade it?

At about 10:44 a.m. ET on Friday, I sent a trade recommendation to my Delta Report subscribers (selling uncovered puts on SPY)… By 1:22 p.m., we were out of the trade for a quick 3% gain.

Pulling off those kinds of gains, over and over… while the market tumbles… It’s just what we do in the Delta Report. And, for reasons I won’t get into here, I believe the best opportunities are yet to come.

I’ll explain everything on May 22 at 8 p.m. ET. Book your seat now.  

Reader Mailbag

Today, a dedicated Market Minute reader shares why Jeff is the first read of her morning…

Jeff, you are the very first email I open every morning for guidance… You are incredibly…not hype. Just a sensitive and realistic view… You are a pleasure in a world of excessive hype.

– Pam D.

Thank you, as always, for your thoughtful insights. We look forward to reading them every day. Keep them coming to [email protected].

An Overlooked 5G Device

Silicon Valley insider Jeff Brown is going public with his latest big find…

He’s uncovered the details on a new computer part most investors have overlooked. It’s an obscure story, and he hasn’t shared all the details yet. But he’s certain that this specific part will be a necessity to the world premier smartphone makers – especially when 5G hits later this year.

He’s broadcasting his findings this Wednesday night, at 8 p.m. Don’t miss it.

Jeff Clark's Market Minute Archives

Jeff’s intuitive feel for short term market swings and his strong protective discipline have allowed me to lock in thousands of dollars in gains where I might otherwise have just ridden the markets up and down .”  -Chris, a reader and “seasoned investment advisor” from Seattle

Jeff -- your picks and analysis have been nothing short of amazing. I have traded the market for many years but I must admit, I have NEVER seen something this good.” - Mike H.

In only 2 weeks of using the service I’ve booked over $10K in profits. Needless to say I’ve paid for my membership.” - Tony J.

I started following Delta Direct about 3 weeks ago… I bought a small investment from one afternoon to the next morning. About 11AM I got out and made 8K in less than 24 hours.” – D. Tilghman