AI
Thursday, August 23, 2007 5:38:12 PM
Put/call ratio. It is a rare day when we see the put/call ratio below 1.00 lately, and I did some checking and found some interesting things with the weekly put/call ratio.
When the weekly MACD 12,26,9 of the CBOE put/call 0.07-0.08 and pulls back, the SPX puts in a pretty decent low. In the 2000-2002 bear we usually rallied for 1-3 months after this event, with the rally taking a few months to start after summer 2002.
Sometimes there is a re-test with a slightly lower low after this high put/call reading, and that could still come in the end of September if it's operative.
What struck me was how much the price action on the SPX in 2007 resembled that of the SPX in late 1997 to mid-1998. The events are also very similar, with hedge fund meltdowns. As you can see, we rallied strong to finish 1998 after the lows.
When the weekly MACD 12,26,9 of the CBOE put/call 0.07-0.08 and pulls back, the SPX puts in a pretty decent low. In the 2000-2002 bear we usually rallied for 1-3 months after this event, with the rally taking a few months to start after summer 2002.
Sometimes there is a re-test with a slightly lower low after this high put/call reading, and that could still come in the end of September if it's operative.
What struck me was how much the price action on the SPX in 2007 resembled that of the SPX in late 1997 to mid-1998. The events are also very similar, with hedge fund meltdowns. As you can see, we rallied strong to finish 1998 after the lows.
http://www.investorshub.com/boards/board.asp?board_id=1613
AJTJ's Market Pulse
Do your own DD. Void where prohibited. Observed side effects include darkening of the stool, spontaneous amputation, and death. Rosebud.
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