Reviewing The Put/Calls

After reviewing four put/call ratios and their performance this year in picking tops, the two clear winners are the CBOE Total put/call and the dollar weighted equity put/call. The CBOE total gave three signals and all were good. The dollar weighted gave the same three signals plus caught the top in early August that the CBOE total missed. However, it did give two additional signals that were more like resting points.

The dollar weighted equity put/call gave a sell signal at the close yesterday and the CBOE total will likely give one today at the close or in the coming few days. In most instances when these sell signals occurred the market was maximum overbought. That will not happen until the close on Monday. Still, it does not seem like a time when one should throw caution to the wind like most are doing.

1 comment:

nicasurfer said...

Today was my lowest put call ratio i have ever recorded. I only track the CBOE equity only. Below is my spreadsheet info.

12/9/2010
Call Puts
456318 111192
624450 189457
773622 269452
882461 338319
987097 415769
1054905 457294
1112293 484851
1201790 526612
1287843 562812
1373660 609016
1450245 648236
1539052 697395
1682143 759835
14,425,879.00 6,070,240.00
Putt Call VIX
0.420788224 17.35

Today i bought VXX for a swing and calls on the vix.