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Non-Tech : Raptor's Den
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To: rogermci® who wrote (5507)11/12/2002 2:31:54 PM
From: Shack  Read Replies (1) of 10157
 
In general I agree with you. I see the CBOE equity P/C is .74 which is fairly high. But...

1) These numbers reflect only CBOE, and I have an equity P/C ratio of .62 today for all exchanges, which is neutral.

2) You must remember this is a moment in time and a single day reading is only helpful if you're trading very small time frames and even then it is not that much help IMO, only a clue.

I have a 10 day EMA of equity P/C siting at .57 which reflects bullish sentiment. Sure we have relatively higher P/C today but what about the all the calls traded in the last few weeks? We presumably use these numbers to gauge sentiment and use them as a contrary indicator right rogermci? Well far more options traders will be right than wrong should we rally right here, a peek at open interest will tell you that.

Even if you only use CBOE data, take a look at this chart and you can see that the MA's show put/call in neutral territory:

stockcharts.com[h,a]daclyiay[dd][pc20][vc60]&pref=G

I find too many traders (both bulls and bears) make wayyyyyy too much out of single day readings and neglect the trend. All you have to do is see all the readings on the above chart which are over 1.00 during May, June and July to see how irrelevant they are. We still fell like a rock until the end of July.
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