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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: Killswitch who wrote (14444)8/23/2002 6:59:22 PM
From: Killswitch  Read Replies (1) of 19219
 
"'Option Premium' Ratio
08/23/02 04:48 PM EDT

Further explanation regarding the "option premium" ratio I mentioned this morning. It relates the price of the average put to that of the average call, and is reported as far as I know only in Investor's Business Daily.

Chris Cadbury has done some extensive work on its application, and again, he noted, its reading of 0.93 reached last Friday as the highest and most bearish of the year.

Low readings are bullish -- a 13 was seen at July's low. He also pionted out that the five-day TRIN (Arms index) at around a 3.0 for three days is clearly in bearish territory.

He didn't like the Nasdaq Volatility Index (VXN) below 44 yesterday either."
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