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Non-Tech : Investor Sentiment

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To: xtahce who wrote (13)	6/28/2002 5:34:48 AM
From: Steve Lee	of 53

Do you know if stockcharts have a symbol for equity only P/C? I believe $CPC is equity and index. I think an equity only measure is more useful. I have the 10 DMA of equity only P/C at 0.765 currently - a middle of the road figure. On the subject of P/C, you will enjoy this article from Jim Nissen. It is from 1983 but still very interesting: qtt.homestead.com Here is a quote: "I began to notice a strange but consistent pattern. Increased volume in high-priced options tends to be a contrary indicator. But higher volume in inexpensive options usually is a leading indicator. Thus, before advances, volume typically increases in low-priced calls and high-priced puts. And before market declines, volume increases in low-priced puts and high-priced calls." He goes on to describe an indicator that attempts to take account of this and boil it down to a simple number, which can be used as a measure of sentiment. It is particularly interesting because it uses a dollar weighted P/C. I have always been concerned that the P/C can be skewed by someone for instance buying a large amount of speculative low priced options and having an unduly large influence on the P/C number, although the amount of dollars behind that sentiment is comparatively small.

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