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Non-Tech : Raptor's Den -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (5514)	11/12/2002 11:39:07 PM
From: Dave Bissett	Read Replies (1) \| Respond to of 10157

Comparing that P/C ratio chart to say, SPX, over that time period doesn't lend itself to very solid conclusions. The PC MA's fell from mid-June to mid-August. SPX fell June-July, suggesting a strong positive correlation with PC but then price bounced hard July-August while PC continued to trend down, breaking away from the positive correlation with price and establishing a negative correlation with price. This negative relationship continued in the August-Sept time frame as PC trended up and price trended down. I can't recall reading any studies of this relationship but eyeball inspection suggests nothing reliable. It's at least a more complex relationship than a simple correlation, involving variables that I don't have a clue about. It's no wonder there's a bull-bear debate about the meaning of the P/C ratio, because either signal can be found depending on the time frame you look at. Overall it doesn't look like a reliable signal, confirming, contrarian or otherwise. Dave