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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 21 4:00 PM EST

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To: Haim R. Branisteanu who wrote (24451)	9/1/1999 9:44:00 PM
From: John T.	Read Replies (4) of 99985

Haim, the CBOE Market Stats that you posted look pretty grim. I haven't seen Put-Call Ratios this high in quite some time. I follow the CBOE Equity Put-Call Ratio especially close. Today's equity only put-call ratio of 0.89 is the highest since October 8, 1998. This indicates extreme bearishness. Here is a link to my chart of the equity only put-call ratio: home.swbell.net Notice that the 21-day EMA (red line on chart) of the equity only put-call ratio is heading upward. According to Lawrence McMillan, when the 21-day EMA peaks and turns down it is bullish and when the 21-day EMA troughs and turns up it is bearish. I think the 21-day EMA is indicating extreme bearishness. Recall that on August 6, 1999, the equity only put-call ratio spiked to 0.6246. Four days later, the market turned around and rallied. The question is: Whether the put-call ratios should be considered as contrary indicators, meaning that a rally is imminent, or whether they indicate impending doom. I know that Heinz Blasnik is good at interpreting sentiment and put-call ratios. Maybe Heinz can give us his analysis?

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