Hi John; I am familiar with burning up money on options, I still
trade them, but much more carfully than when I started.
In one post I said optins could be played severl ways with spreads
that it would not be possable to tell any thing by the put/call
ratio. However the cost premium of strike prices on either side
of the index could indicate something much like futures do.
the S&P 500 futures is a good indictor of how the stocks will
move on the open..but both the stocks and it move fast to adjust,
if it is not around cash value..they sell one by the other in a
flash. Were the option premiums would not swing as wildly, they
may give some sentiment..( mostly short term ). I did look at
them and they are high on both sides..to me they exceed the cash
value by a lot and look like an expensive way to hedge. I guess
most of them bought sold are hedge positions aginst stocks going
down if your loaded up..or stocks going up if your in cash..
I'v not given much thought to index options but seem to run into
a dead end if trying to use them like futures..as they bet both
ways and either way can be bullish or bearish.
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I have looked at the bull % numbers you posted..and have studied
on them some..my mind works much in the way a navigators would,
as that's what I did for a living. You have something with that
bull/bear thingy, wish I could get just the numbers, with out the
percent signs, and dilimited for importing into lotus..I still
use the old 2.4 ver in a dos window..I have to many programs
written for it to toss it. One calulates oil cargo on a ship,
just plug in the temps, api, and ullage..it takes over took me
a year to make the pilot program ( that can be adabted to other
tankers ) or even a tank farm.
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Enough of that..the NEUTRAL factor must be used to get
real sentiment. It will act as an amplifier..and is very important,
Get the mean < average > of all the neutral positions.
The people on the fence likly have the buck's on hand..the real
bears are short , the bulls are in but the guy in the middle,
could turn the tide. Tally up positions get the mean average
for the neutral..the on each set if that average is above or below
the mean average ..add or subtrat that amount to your bullish
percent..this will amplifiy or diminsh the orininal but its
important, and could well be the key to finding out why the
anomily happened in 92. More people percentage wise on the fence,
above the mean average should in my opinion be taken away from
the bull percentage, the inverse is true.."less on the fence, invert
it and add that to you bullish percent.." as it means even less
money is availabe..you may want to play with it and just use half
but plug it into the equation..I think you'l like it.
hope I said it right so as you got the picture.
Jim
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