Sector Investing

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Sell signal coming? Keep an eye on the put to call ratio today. The first two half hour readings are beginning to show a potential short term top (at least) with readings at 0.50 and 0.48:

http://www.cboe.com/MktData/default.asp

The TRIN may take a couple days to generate a sell signal of its own:

Put/Call Ratio - TRIN and Put/Call Ratio/Vix Ratio - Effect on the SOX and SMH:

There is a seemingly direct effect seen with the rise of the put to call above 1.0 on the SOX and SMH. Also the TRIN when it rises above 1.5 on a five day moving average. Perhaps it does not work immediately but it shows up more often than not and both indicators have generated buy signals. Therefore the SOX and SMH are likely to move higher until these indicators fall. Low extremes for the put to call ratio are found with closes below 0.50. On the TRIN when we see the 5 day moving average below 0.85. At that time we would have sell signals:
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And lets not forget the effect of the VIX on the whole affair. Note the 21 day moving average is still moving higher. Until it turns lower the SOX can run higher. This might not happen until the SOX has reached an RSI of nearly 70 and has penetrated its upper Bollinger Band:


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These charts should work well with any number of technology stocks and indices to help traders determine potential changes in short term trading directions for said stocks and indices.

RtS