C: Wow, that is such a great question. Look at Hamilton's piece on the p/c at the Zeal site. First off, the 21 dma p/c is at historic highs and such a high p/c has translated into good sized bullish moves.
But, on the other hand, the VXO -- I like the origianl recipe --is still in a downtrend (actually flat perhaps). It does spike with the put buying but from lower levels. So it is an indicator that still works but from a lower absolute value. VXO moved 50% from the lows on these put buying sprees.
My issue is not so much with the VXO as it still works for me from a lower absolute level. My issue is with the high 21 dma p/c both in March and coming off our low now. Mountains of puts were bought. But as Aunt Clara would say: "Where(s) the beef." We should have had spectacular rallies off these readings. You know, huge white candles and little white ones day after day in nazland and elsewhere for sure. In the good old bull, we these readings would produce instant, huge and sustainable bull moves. So far, we have gotten trading range rallies off these readings. Look at the Sox which is supposed to lead (and it may as late June to mid July is a Sox season) but is still trapped in a weekly downtrend. And if one looks at Taiwan, the chip indicator, how can anyone look at me straight in the eye and suggest that chart will make new highs anytime soon.
The huge p/c and lack of sustained movement off any low is perplexing and I don't have an answer for it. I can speculate as well as anyone. Maybe the move is coming?
But the price indicators I use have worked pretty well continue to do so even with this high p/c in the background.
I have found that my short term sentiment indicators work just as well with the high p/c in the background as they did without it in the background. I am amazed how sentiment becomes so frothy so quickly off any low in the face of the high P/C readings.
Interested in any comments you or others might have.
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