A Cautionary Indicator

Traders are placing big bets on a summertime rally. [Jeff Clark's Market Minute]( Jeff’s Note: Last night, I shared a brand-new strategy you could use to [get paid every day]( the market is open. It only requires one ticker and one trade, per day. And I explained why I see pain ahead for stocks this summer… To catch the replay now, [click right here](. --------------------------------------------------------------- A Cautionary Indicator By Jeff Clark, editor, Market Minute Traders are placing big bets on a summertime rally. They were jumping all over each other to buy call options on Tuesday. The CBOE put/call ratio (CPC) closed at 0.74 – its lowest level since last November. And, it’s just one more warning sign of a frothy market. Recommended Link [WARNING: These 110 Banks Are Planning to Replace the U.S. Dollar]( [image]( Please, pay close attention because if your bank is on [this “blacklist” with 110 banks]( your entire life savings could be at risk. According to this famous banker, you must move your cash before July 26… Or risk losing everything. [Click here to get the details and learn how to prepare]( for what The Wall Street Journal called a “game-changing development.” [PREPARE NOW.]( -- Long-time readers know we use the CPC to help gauge investor sentiment. It’s a contrary indicator – meaning when everyone is [bullish]( we want to be cautious, and when everyone is [bearish]( we want to be buyers. Here’s the chart… The stock market rarely rewards the popular opinion. So, whenever the CPC reaches extreme levels, it’s often profitable to bet on a short-term reversal in the other direction. If the CPC pops above 1.2 – meaning folks are rushing to buy [put options]( – it usually pays to be a buyer of stocks. And, when the CPC dips below 0.80 it’s often a warning sign of an impending pullback. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Of course, no signal works 100% of the time. The CPC dipped below 0.80 in early June, yet the S&P 500 rallied nearly 200 points last month. So, I’m not suggesting readers sell everything just because the CPC is below 0.80. I am suggesting, however, that now is a good time to be cautious. Raise your stop-loss prices. Maybe trim some positions and take some money off the table. And avoid chasing stocks higher into extremely overbought conditions. By itself, a low CPC isn’t a reason to bet aggressively that the market will fall. But, when you also consider the low level of the Volatility Index (VIX), the wildly bullish investor sentiment (a contrary indicator), and the high-priced valuations of the major stock market indexes, a low CPC is reason enough to be cautious. Remember, the stock market rarely rewards the popular trade. And, with everyone buying call options earlier this week, the popular trade is to be bullish. Best regards and good trading, [Signature] Jeff Clark READER MAILBAG Have you been cautious of the extreme bullishness lately? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. IN CASE YOU MISSED IT… [“Dollar exodus” spell trouble for America?]( “I recently noticed a disturbing trend among my wealthy friends… In short, the richest Americans – including Warren Buffett and Ray Dalio – are dumping their dollars… and piling into one surprising asset.” – Brad Thomas [Click here to find out more.]( [image]( [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](