Despite the market selloff, the latest leg of which began last Friday, we haven't seen an appreciable rise in the CBOE and ISE Equity Put/Call Ratios. We track these nightly along with other important indicators in BigTrends Trader's Edge (call 1-800-244-8736 for information on Trader's Edge).
The chart below has an overlay of the S&P 500 Index ETF (SPY) on the top, followed by the CBOE Equity Put/Call Ratio and the ISE Equity Put/Call Ratio with Bollinger Bands. Normally, we would expect to see Put/Call readings over 1.00 during times of a clear market panic -- these often precede significant market bounces, as they mark periods of panicked Put buying by the public. However, both of these readings are around midlevels, which indicates a fairly even amount of Call & Put buying. This is a relative sign of complacency among traders, given the negative market price action and poor economic news coming from around the world on an almost daily basis recently.
Short-term bottom line is continue to be cautious of this market and look to profit on the down side from market bounces.
The chart below has an overlay of the S&P 500 Index ETF (SPY) on the top, followed by the CBOE Equity Put/Call Ratio and the ISE Equity Put/Call Ratio with Bollinger Bands. Normally, we would expect to see Put/Call readings over 1.00 during times of a clear market panic -- these often precede significant market bounces, as they mark periods of panicked Put buying by the public. However, both of these readings are around midlevels, which indicates a fairly even amount of Call & Put buying. This is a relative sign of complacency among traders, given the negative market price action and poor economic news coming from around the world on an almost daily basis recently.
Short-term bottom line is continue to be cautious of this market and look to profit on the down side from market bounces.
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