PV:
First off, when I said, "Right now p/c is 0.789 and the Vix is 40.89, which gives you a ratio of 0.019, which is extremely low by any measure." I meant that the ratio was low, a low number, 0.019; I knew that the VIX and the p/c were both high.
Thanks for your numbers, let's examine them. When I eyeball the chart I get a high for the ratio of 0.045 and a low of 0.015 (hence my description of 0.019 as "low").
Your ratios go from 0.0080 (which I haven't seen on any of the charts) to 0.0208, which is less than half of the historical 0.045 I was looking at.
pc vix cpc/vix
0.20 25 0.0080
0.24 28 0.0087
0.29 30 0.0095
0.35 33 0.0104
0.41 37 0.0113
0.50 40 0.0124
0.60 44 0.0135
0.72 49 0.0147
0.86 54 0.0160
1.03 59 0.0175
1.24 65 0.0191
1.49 71 0.0208
I started to alter your numbers with different sets of VIX and then realized I'm going to get lost. I guess what I'm getting out of studying your numbers is a more profound sense of confusion as to what the ratio means. So I thought I'd just throw out one set of bearish numbers and see what you think.
First, the lowest p/c ratio in the last year has been about 0.48, call it 0.50. Low p/c ratios are bearish in that they show a low level of shareholder/punter anxiety.
stockcharts.com[h,a]dbclyiay[dd][pf][vc60][iut!Lh14,3!Li14,3!Lb14!Lg!Lc9]&pref=G
If you put in a lowish VIX of 20 with that, you get a ratio of 0.025, a number which in your listed set would be more than an extreme bullish bottoming, even though both the inputs are very bearish. So that can't work.
I guess I'm still wondering (even before we get to moving average crosses) just what ratios of 0.015 and 0.045 tell me, since they're both ratios of similar indicators. As noted, 0.015 could be bullish, could be bearish; same with 0.025 or 0.045.
Densely,
Kb |
