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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (13795)	5/10/2002 8:48:40 AM
From: pvz	Respond to of 23153

Dabum, you ask whether the put-call ratio ($CPC) acts inversely to the VIX and the answer is no on a day to day basis. When there is extreme fear in the market, both the VIX and the put-call ratio spike up. However because they don't correlate one to one, the relationship between the two seems to be what makes this work. On an even more macro level, the chart of the put-call ratio on its own is interesting too. Look at the PPO on this monthly chart: stockcharts.com[e,a]mhhlnyay[pb50!f][vc60][iue12,26,9][J2460901,Y]&pref=G Notice how the PPO crossed up above 0 in August 2000, which is when the market really started to come apart. It hasn't fallen yet, but is showing signs that it might start declining soon. Of course "soon" is a relative concept when you're talking in months. I suspect that when it closes negative again we will have a much improved economy and a confirmed bull market, although that may or may not be a long time from now. The PPO on the weekly chart correlates well (inversely) with rallies and declines: stockcharts.com[e,a]whhlnyay[pb10!f][vc60][iue4,16,52!lp20,10,5!lah12,26,9][J3162113,Y]&pref=G The candlesticks themselves don't tell me anything meaningful whatsoever. Of course, we won't know until the end of today how this week will end, but as of now the PPO looks as if it is heading down below 0.