The low CPCE indicates four recent tops (black circles) including the current top. A low put/call ratio shows complacency and a belief that markets will never go down again. Of course, this is when markets go down. The Fed has trained traders well hooking them on the easy money crack cocaine creating the lack of fear or worry. The three prior pull backs resulted in a drop in the SPX of 50 points in 2 or 3 days, 32 points in 1 or 2 days, and in mid-July, 25 points in 3 or 4 days. Thus, assuming the 1694-ish level in the SPX as the top over the last couple days, the current print at 1685 is about a 10-point drop in 1 day's time, so far.
Averaging the three prior low put/call prints results in a drop of from 25 to 50 SPX points in from 1 to 4 days. The average is 36 points in 2 or 3 days. Thus, if the SPX has dropped 10 points in one day it would be reasonable to expect another 10 or 20 point drop over the next couple days. This exercise only entertains the initial knee-jerk move off the low CPCE. Overall, the low put/call indicates uber complacency that has to be remedied over time so lower prices in the SPX are expected as the weeks move forward. 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.