What's up with the put/call ratio

  • The Put/Call ratio is showing extreme levels of investor enthusiasm. I find that very hard to believe. This has been my favorite indicator over the years but I simply don't trust its message right now.
  • I don't want to speak too soon but its nice to have a quiet day. I believe that a few quiet to up days will go a long way in breaking the selling fever that retail investors have caught.
  • Maybe then the mainstream media can focus on more important issues, like Brittney Spears.
  • Is anyone positioned for a rally?
  • The SKF accounted for 35% of JPM's trading volume on Friday. Aren't stocks supposed to move the indexes?

1 comment:

Douglas said...

thanks for this. This is very interesting.

I follow the Put / call ratio and I think that the current ratio suggests amazing complacency.

The implied volatility indicators (VIX, VXO) have been dropping a lot relative to where the S&P 500 has been going.

On the other hand I have read this:
http://www.tradersnarrative.com/caution-option-traders-wildly-bullish-2345.html

which would support what you are saying.

Do you have any reason to know why the PC ratio would be misleading? The implied volatility numbers are consistent with there being relative complacency...