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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: bobby beara who wrote (4340)12/24/1997 11:10:00 PM
From: feewaybill  Read Replies (1) of 42787
 
Hi Bobby,
Investors Business Daily ran a good article on the ratio of trading volume in Puts vs.Calls in their Thursday Dec.18 issue(hope you might find a copy?) Of their 14 psychological market indicators that are listed daily on the market page, IBD indicated to me that the two most important ones to track would be #5 ratio of price premiums in Puts vs. Calls and #6 ratio of trading volume in Puts vs. Calls.
I have a limited undestanding of this indicator and don't have many answers for you. Your observations about the Dec. 5th(bearish) seems correct to me. Every day in IBD you can find the current put\call ratio,the five-year high and low,and the 12 month high and low. Experts say it flashes a bullish signal over 0.80 and turns bearish below 0.40. As you observed on Dec. 5th the ratio was almost to the .40 signal. since then the Dow has lost about 400 points. Seems like this indicator might be worth looking at............Bruce
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