Monday, August 17, 2015

8/17/15 put/call ratio

I tried to use the put/call ratio for short term timing.  I never could make it work.  It did explain the level of anxiety in the market but I never could get rules developed to use it.  It took a lot of time and I abandoned the effort.  In fact, it was then that I decided to focus on intra-day trading solely.  But then again, here I am writing about swings.

I discovered this put/call ratio symbol on Stockcharts recently and played with it. The dots are the weekly put/call ratio.  Now ignore them.  The blue line is the 20 day simple moving average of the dots.  The solid black line is the S&P500.

The blue line shows trends.  You can see back in the later 2011 that the put/call moving average responded to the mini panic.  Then it went on a down trend as the market resumed upward.  You can see in 2014 the moving average was sideways.  You might say it was transitional.  In 2015 it is definitely trending up.

The S&P500 is sideways in 2015.  You might call it transitional.

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