Thursday, September 10, 2015
CPC and CPCE Put/Call Ratios Daily Chart
The market drama continues with large intraday and day to day points swings in markets because of the elevated volatility. Traders and investors remain optimistic over the intermediate term and long term. Wall Street analysts have not downgraded this year's forecasts and continue to expect the SPX to end the year between 2150 and 2350. Separating the longer term from the near-term, there remains a tinge of panic and fear in markets. The put/calls have not printed a lower low in over 5 weeks.
The expectation over the last couple days is for a rally to occur due to the CPC at 1.50 and CPCE at 0.90. Stocks rallied strongly early yesterday in keeping with this projection. However, the day turns negative and ugly and equities gave up the ghost. The CPC is at 1.03 and CPCE at 0.71. The put/calls never made it down to the red circles in the right margin to indicate complacency so there remains angst in the stock market. Some traders lament that a wash-out low is needed in stocks to establish a bottom. This type of sentiment exactly reflects the ongoing worry and angst which would be consistent with the charts above continuing to move lower towards complacency (which means the stock market should rally).
Perhaps stocks do wash out, if so, the put/calls would simply print in the green circles in the right margin and then make the trek lower which creates a market recovery. The expectation, however, remains that stocks should rally until the put/calls drop further into the red circles which will shake out the market negativity. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.