I've been digging around in the American market. Here's another warning - from the American Market. The SPY is an Exchange Traded Fund that replicates the S&P500.
The Put/Call Ratio is now at a multi-month low. It is now much lower than it was in early January when the big retracement from January into February began.
The Put/Call Ratio is a contrary indicator based on the assumption that when options traders are showing extreme bullishness (or bearishness) the market is likely to change its trend.
These warnings, like the divergence in my previous post, are just that - warnings, not timing signals. But they mean we should take signals when they occur in the primary indicators (the price/index charts) very seriously.
Cheers
Red
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