Bear, I think this analysis is correct mostly for options on indices and it can lead to the wrong conclusions when looking at P/C ratio (they really look more at the premium differential between put and calls with strikes equally distanced from the current price).
If you look at the simple equity P/C ratio (and one uses only equity to take out the impact of options on indices which is traded more by big money), heavy put buying (namely a ratio at or above 1) is bullish for the market, since it indicates that Mosis thinks a fall is imminent, and heavy call buying (P/C ratio at least under .5 my preference, .44 and I have seen few rare occasions at major bear tops of under .4) indicates an imminent decline. We had a reading of .48 about a week or so ago, since then, normal to heavy put buying has been the norm.
Zeev
