Typically, large volume of puts on indices must be considered hedging by professional money managers. You need to add to the 285,000 pouts contracts on indices in general also puts on QQQ almost 300,000 contracts diamonds and (70,000) most of these were "deep out of the money" puts on the January contracts. That reduces the epc from around .95 to around .44, a little better than the last few days, but still a little bearish. I have tried to build a correlation between heavy put buying in the QQQ and the market subsequent behavior, and I found none that is reliable. So, all I can say is watch for the nature of the retrenchment after the next two days or so (I still expect a local top, on Monday, maybe even a G&C), if the EPC rapidly goes up (without the QQQ input), then the relapse is probably going to mild (1955/75 or so) and later in January we should attempt taking out 2100 (2093 is the nominal initial target high for January). If the EPC does not increase and stays well under .4 or so during the initial stage of the retrenchment, my January map may have to be modified. Right now, my guess is tat EPC wil climb well above .55 during the early January retrench, making the market safe for the bulls for a little longer.
