Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: shasta23 who wrote (12056)	4/26/1999 4:37:00 PM
From: pater tenebrarum	Respond to of 99985

Stefan, normally the OEX p/c ratio tends to decline as the market goes higher, due to the fact that rising prices encourage an increase in bullishness among options traders. the ratio is a contrary indicator though, so the lower it gets, the closer the market is to a top. when the ratio rises along with a rise in the market, it shows a great deal of skepticism and disbelief, and that argues for the rally to continue. the most recent example for this phenomenon is the rally from the october low, which was accompanied by a consistently high OEX p/c ratio, as it was assumed to be a 'sucker's rally'. the first intermediate term top occurred only after the OEX p/c ratio had begun to deteriorate for about a week. btw, i write a little report on the options-related indicators on this thread every day, so some of my recent posts may give you more insight. regards, hb