Our Put/Call 20-dma chart hit a new high (omigod AGAIN?) at 1.0375. The prior all-time high was 0.9825.
Having harped on about this chart I wanted to show you just HOW unusual the current action is. The blue highlighted areas show where the P/C 20-dma is above 0.88. The magenta line in the bottom pane shows the 200-dma Disparity Index. That shows how far above or below the 200-Day Exponential Moving Average was the SPX's closing price.
In all cases prior to March '04 when the P/C 20-dma hit a level greatere 0.88 the SPX was AT LEAST 7.5% BELOW its 200-Day Exponential Moving Average. In other words put-buying didn't hit climactic levels until the SPX had fallen to EXTREME oversold levels. In '04, by contrast we are seeing the largest quantity of put-trading in HISTORY while the SPX floats above its 200-dma and is less than 5% from its cycle high.
Hey, I can always be wrong. Any of us can be. The market is no place for anyone who's all about being "right." But until the market shows me otherwise in some new and interesting way, I gotta believe that the huge amount of put-trading is mid-term bullish, just as it has been in the past.
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