CBOE Put/Call ratio is flashing orange
Posted on 18 January 2010
A quick update on the CBOE put/call ratio that is trading at levels that typically suggests stormy waters ahead for the equities market.
With volumes in both puts and calls on the up post the Christmas lull, the market is betting on increased volatility. But as we can see in the following breakdown, it is renewed call buying that is driving the ratio lower:
The spike in call volume against the mixed bag of profits reported to date is worth monitoring. A subsequent turn in the ratio higher has often presaged broader weakness across the indices.
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