I have been complaining about the 10 day moving averages of the put/call ratios and saying they were not likely to reach the type of extreme they saw in January or other major highs until next week. A reader on the message board, CP, posted a chart of the 5 day moving average of the CBOE Equity only that looked pretty extreme.
I don't usually pay much attention to the equity only reading at the CBOE because it usually is inline with the overall reading, which I follow, and is not yet close to an extreme. Upon seeing the chart CP posted I decided to take a look. Below are the 10 Day moving averages of the CBOE and ISE equity only.
I posted 2 days ago) or the ISE Equity Only.
I believe the market is closer to extreme optimism than extreme pessimism. I also realize that every top looks different and we might not necessarily see the same extremes this time around.
To make things crystal clear I am not bullish and am actually slightly short because I got rid of Vodafone but did not dispose of the related hedge. I want to see the whites of their eyes before I get short and as a result run the risk of missing the top. However, that same cautiousness has stopped me from getting run over this entire run. Have a great weekend.