The P/C ratio hit absolute extremes which historically suggest a market top a few days ago and the overall structure over the past two weeks resembles the Feb 2020 top to the day. With the QQQ overload, I can see clearly that the tsunami mays just around the corner, exactly as an important resistance line is about to break and everyone about to jump on the bull train.
Kommentar
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Today the P/C ratio hit a historic low of 0.420. The daily sentiment also shows that the current p/c voume is 150K calls to 80K puts at the SPY 320 strike. This is an astronomical bullish sentiment that I have never seen in my entire trading career... so if 320 does not form some kind of massive resistance, then I don't know what will in this magic levitated stock market world.
@valentinoamoro, when I look at the data it is even more extreme now. Hopefully we reach the top soon....
valentinoamoro
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@Fips81, there are lots of indicators that a short term top is forming, however, if the majority of investors bet on that and start to short the market, it will not happen. That is partly to blame for this massive surge off the March lows.
supere
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@valentinoamoro, Nothing is stopping this train. We will likely fill all gaps on the major indices at least. They are sucking the money out of every bull out there, especially the newbies, and slaughtering every bear before taking this down.
Fips81
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@valentinoamoro, can you explain what this chart shows exactly? How do I have to read the numbers? What is the % of long, short? Thank you
supere
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@Fips81, The chart shows the ratio of puts to calls bought in the market. A very low number like the one shown, and the even lower value shown today suggests there are way too many people buying call options and that is using a sign of a top. However at this point it seems like the indicator is not working as the market just keeps popping higher and higher relentlessly, even though every single topping indicator has been exceeded weeks ago.
Fips81
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@supere, thanks you very much! Think we will reach the top next week....then down.
valentinoamoro
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Thanks for calling this. I've been highlighting the warnings flags this bellweather of investor exuberance has been shouting over the past few weeks. By itself, its not much - but there are other convergences. We shall see, I dont think we shall break the ATH's in SPY for many years. The larger question though, is how long can the market move sideways.
supere
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@valentinoamoro, I doubt it will move sideways for much longer like many expect, exactly because of this chart. Way too many open call options bought by inexperienced novices. They will likely all be turned into junk very quickly. In fact, since call buying was non-stop even prior to the Feb crash, I'm expecting a drop through the Mar 26th lows so swift that it will take most of the whole world by surprise.
The general key is this: 90%+ of call options must be wiped out before they bank profit & the drop must be so swift that bears have barely a chance to hop on the train before it hits the next bottom.
speedmama24
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@valentinoamoro, could you tell me the symbol on thinkorswim to find this. I tried USI:PC, but it didn't come up.
Sh33p
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DollarTree is up 12-13% today, consumer staples up generally, also seeing money flow into high dividend stocks the past two days. Possible repositioning for an imminent rug-pull?