A couple of my indicators are seemingly supportive of a bottom forming but as with all other indicators we need to look for positive divergences. Lower lows with improving numbers in these indicators are what we should look for if the market does not manage to rebound. I'm not the only one lately looking at the put to call ratio as being high enough to support a rebound effort. On the three year charts below you will see that a high put to call ratio is not enough to guarantee a rebound. Neither are poor advance/decline ratios. In point of fact these would be some of the least useful indicators I follow. Still they should not be totally ignored.
3 Year Charts of the CPC vs the SMH and the ADV/DEC ratio of the NASDAQ and NYSE
The first set of short term indicators I use are based on the put to call ratio. To go long it is best to wait for the put to call ratio to close over 1.0. On the chart below the put to call ratio now updates intraday but it is not always accurate! Intraday reading of the put to call ratio can be found here updated every half hour after the open:
The more days in a row the put to call ratio prints over 1.0 this the more likely the bottom will be a strong one. The link above shows intraday readings of the P/C ratio.
Also closes on the put to call ratio below 0.50 and sometimes a bit above are indicative of a short term top. Watch the simple moving averages as well because periods of too much buying of puts or calls will almost certainly bring about market bottoms and tops respectively. On the CPC/VIX ratio; this is largely a longer term indicator where investors are likely to make more money on the long side once the short-term 21 day sma has crossed above the 200 day sma. The reverse is true as well. An investor will likely make more money on the short side when the 21 day sma crosses below the 200 day sma:
Adv/Dec ratio overbought above 1.6. Oversold below 0.75 on the 10 day SMA's:
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