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Put To Call Ratio Unexpectedly Jumps To Three Month High As S&P Makes New Highs
After the equity-only put to call ratio for most of December had been at very suppressed levels for most of the month, it suddenly jumped rather notably on Friday, pushing to a level not seen in well over three months. Courtesy of Sentiment Trader we have some historical observations of what happens when the S&P trades within 1% of a 52 week high concurrently with the Put to Call ratio jumping to a multi-month high: for those who still care about technicals, here is the verdict: "there was only 3 other days when the S&P 500 was trading within 1%
of a 52-week high and the put/call ratio surged to at least a 3-month
high. Those dates were 2/24/05, 4/26/06 and 10/3/06. After the first two, the S&P jumped a little less than +2% over the
next 7 days, then slumped -7% over the next 30 days. The two were
remarkably similar. Not so the last instance, which also rose about +2%
over the first 7 days...and then just kept right on going."
Full observations from Sentiment Trader:
This is no doubt due to low-volume conditions and year-end shenanigans, but there was more trading activity in put options on the Chicago Board Options Exchange on Friday (relative to calls) than there has been on any other day since August 31st.
Going back to 1997, there was only 3 other days when the S&P 500 was trading within 1% of a 52-week high and the put/call ratio surged to at least a 3-month high. Those dates were 2/24/05, 4/26/06 and 10/3/06.
After the first two, the S&P jumped a little less than +2% over the next 7 days, then slumped -7% over the next 30 days. The two were remarkably similar. Not so the last instance, which also rose about +2% over the first 7 days...and then just kept right on going.
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CNBC reporting massive call buying in the VXX as well.
Without you or CNBC there'd only be Ophrah
People never learn. VXX is toxic.
I thought your focus was now on recovery value? Ditch the charts...and CNBC!
Just more proof that the market is going MUCH higher
There is a real war going on in oil futures. Our .gov central planners are playing Whack-a-Mole. I hope they brought a lot of quarters.
http://360digest.com/wp-content/uploads/2009/06/whack-a-mole.jpg
Better "Whack-A-Banker" http://www.timhunkin.com/a152_whackabanker.htm
Whack-A-Banker Vid http://www.youtube.com/watch?v=AblNIFj1C90
No worries. They never run out of quarters.
Just another indicator to manipulate, like the VIX it's all meaningless people. ALL THAT MATTERS IS PRICE, FORGET THE REST!
Lock in profits.. hunker down. Bring the kids inside.
vc
My crystal ball says Chase is fucked. I may change my name to long_JPM_out_of_the_money_puts_horseman. Catchy. No?
if the SP fails to take out yesterdays high of 1276 and closes down today, and crude closes below 91 and the euro fails to hold 134, and gold closes below 1400, then we have a short-term reversal signal. with today's sell-off, gold is forming the dreaded triple top, also known as the "head and shoulders" with highs around 1420-1430 in early November, early December, and now early January, with the middle of the three being the highest. technicians will take note, and all the hot money PM longs will become hot money PM shorts. I think the key level for gold to hold is 1350. if this breaks, look for an extended intermediate term sell-off. buy the fucking dip works until it doesn't/
I can't read this and help but to think about some methusela old woman with gray hair down to her ass in a ratty, torn robe and a really long pointy nose with a mole on it and fingernails as long as her fingers... standing over a bowl of pig intestings prodding and poking them, to her strange amusement... afterwhich she gives some prediction.
you've pretty much got it spot on. there are still a few witch doctors out here in the ether trading futures. precognition is a real mindbender
Bob Pisani said the word on the steet ..... " Money is rushing out of gold into stocks "
Looking for yield ?
Oil is getting killed.
Same with/gc; /si
Killed? Really?
Look at the WTC (under INSRTRUMENTS) daily (the D button):
http://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/FinanceChart.aspx?m=c
Citi CEO Vikram Pandit to be arrested
http://dawnwires.com/uncategorized/citi-ceo-vikram-pandit-to-be-arrested-for-breach-of-trust-in-india/
Robbin Robby Rubin dropped the dime.
yes, PMs getting killed too!
Gold. Gold will be CRUSHED
oh im looking forward for a hopefully big dip!
BEEEG dip a' comin, very
Not in Rare Earths my friends.
MCP, SHZ nearing double digit % gains
None of them have any revenues. Any.
Go all in DZZ or STFU.
Great info--thanks for all your hard work in gathering this data, ZH team.
There have been so many technical indicators flashing a top over the past few months. None seem to work anymore. We need interest rates to blast higher or double dip in unemplyment claims or some fundamental undeniable read on the economy to turn this bull market around. There is too much $$$ flowing into equties from the Fed.
In essence, I believe it is what puts are being bought. If they are far OTM puts for a few cents, then it is just insurance more than a predictor. It is hard to believe that as long as the Bernak is dropping cash from the lolercopter, that the markets will actuall fall. As long as we are stuck in Zimbobwe mode, it is up, up, up we go. Once this free money stops (since retail is still avoiding stocks, but I'm sure once they allow you to use your WIC at MS or JPM, then there will be retail involved), these markets will fall faster than the eye can blink.
ZH. If you run the 10 dma of CBOE equity put/call ratio and see that it's at or near yearly lows. $CPBE
Tyler,
Gold getting monkeyhammered. Time for a " Off Like Pong " post .... $40.00
OT:
News from the Blow Horn [CNBC]...sometimes a criminal syndicate Wall Street banker says it best. Now of course, folk know that I don't think much about the intelligence level of said bankers, which is why I paid close attention to Scott Redler's [T-3] comments when challenged by a bear from Roubino Capital [yes...a bear on the Blow Horn] who suggested the Fed bubble is about to break.
Anyway, Scott Redler said, "I think it is irresponsible to make a comment like that because we are tying to get confidence here." Really, Mr. Redler? You mean a double in the S&P is still "trying" to gain confidence? You mean it is still "trying" after receiving $2 trillion in Bernanke bananas? Exactly!
And why is there no confidence, Mr. Redler? Why isn't Average Joe buying your shares from you, and your other banker products? Well, Mr. Redler, that is because YOU ARE STILL THERE DESPITE THE CATASTROPHIC ECONOMIC MESS YOU AND YOUR COHORTS HAVE MADE CAUSING NEARLY 20% OF AMERICANS TO LOSE THERE JOBS!
So do us all a favor, Mr. Redler of T-3, please dawn your hockey helmet now so that you remain safe and sound and ready to receive your court summons..when folk at the SEC finally figure out the below statement and how it pertains to WHAT THEY MUST DO:
CAPITAL CANNOT FORM WITHIN WALL STREET ENTITIES AS CORRUPTS AS THESE!
Could this be why Wall Street criminals are buying puts? Maybe I'm not so OT afterall. Here come the sell machines, brothers....
If we refined the put/call ratio using the SP500 against the 20 day moving average of all options we find that since the crash lows, including pomo 1,2, lite etc. that 100% of the time after the 1% sta is hit the market corrects roughly 50 /ES points.
What's the problem...the market is only 70% overvalued via the Q ratio...how long the insanity continues is the question of which we unfortunately cannot answer.
After China slows & the trade deficit drops big and they revalue 20% over the next 2-3 years we are going on a ten year bull run. Buy low.
SPRD,MIPS.
I have learned the hard way not to dismiss any possibilities...if there is to be any growth in the short and medium run the emerging markets will need to be the ones.
I would like to change my previous statement: I don't think you worship at the alter of Gary Pilgrim. I think you actually are Gary Pilgrim.
Look at SPRD & MIPS over the last year w/volume & look into the market they are selling.
I will look for a book on Mr. Pilgrim, interesting. :-)
leaving gold for stocks
The banksters never lose and htey have setup the dopes perfectly. The dopes are running over the cliff. Banksters buying up gold shares, gold, silver shares, and silver as the lemmings run like hell to the "yield" side. Little do they know they have just been slammed. Buy the dips bitchez buy the dips. Cause the alternative is oblivion.
Hurry hurry yield over there yield over there!!!!!
All the while I sit on yield from the 1900's family buying gold at 35 bucks an ounce and silver for pennies.
NOW THAT IS FUCKING YIELD MY FRIENDS
When I saw the headlines of "Slim" possibly entering the silver market via miners the first thought that crossed my mind is what better time to have the metals knocked down so the big money can come in and purchase.
(d)
I have a different interpretation: it was time to cool the commodities speculators. Those with inside information bought puts, just like what seems to 'magically' happen before buyout announcements and merger announcements in individual stocks. The options market is always the main forum for illicit profiteering.
No sign of a top anywhere in sight. Not even in commodities or PMs specifically. Within a few days we'll be back challenging the highs. That's because there is nothing but fear that availability of key raw materials is in question. There's a long list of reasons for this but geopolitical forces and natural disasters are high up. And global inflation is close to spinning out of control not just in developing countries, but in the majors including the UK and Europe
That's what you get when you print dollars endlessly, forever year in and year out for 4 decades. It sowed the seeds of disaster. All those dollars are coming home to roost, pushing up inflation. The only reason we don't see it clearly in the US is because we actually have biflation: as housing deflates that accounts for over 40% of CPI and masks rampant price inflation. Lotsa Luck!
we are in a debt bubble. the money has already been spent. the problem with the inflation hypothesis is that it requires velocity. the whole monetary system rest upon a fragile base of sound collateral. because most of the collateral is repo'd every night and passed around the globe from balance sheet to balance sheet, collateral becomes more and more precious, valuations become more and mores stretched, and the system becomes more and more precarious. systemic debt service is now too great relative to cash flow. the only options left are default (aka debt deflation), or permanent slavery (aka IMF bailout, methadone maintenance, stagnation), or most likely an attempted combination of the two. the problem with excess debt is that the interest payments depress demand. when no one else wants more debt, then money becomes dear, not cheap.
so yes, in the next decade people will continue to rush into commodities and PMs as the currencies are debased, but the real race is for the productive assets themselves, the mines, the forests, the oil wells, the pipelines. but since the financial debt system is so hyper-leveraged, the prices of the commodities will be subjected to massive swings up and down as margin calls wipe out those who get caught leaning too far one way, like the base runner ready to steal getting picked off by the pitcher.
the $90 oil stops just got triggered. here comes the vol...
Pretty sure another reason this spike is seen is due to taxation minimization strategy.
Gold. Gold down $34. Welcome aboard Slim. Warms the heart to see a billionaire sucka get conned.
Carlos Slim hasn't, that anyone knows of, bought anything yet. You do realize you're calling the world's richest man a "sucka" right? That's like a homeless guy calling Brad Pitt unlucky. BASHING FAIL
Celebrity worship is a cerebral crime.
So are stupidity and idle lies.
(d)
Tyler:
You do realise that you are violating copyright by posting this, don't you? Its not like Jason is some big I-Bank research dept with some big soft-dollar arrangement that you don't mind screwing either. The guy is a one man shop (with his wife doing billing, etc) who runs a fee based research service (a very reasonable fee, I might add) with no book to talk up or down or other agenda to promote.
I am not Jason and certainly don't speak for him, but you might try calling the guy up and asking him before you start using his material. You may or may not get the answer you want, but you are certainly not going to win any friends taking his stuff.
Thanks
(d)
Jason who?
"Full observations from Sentiment Trader" is the best favor TD can do for Jason's site.
That may or may not be the case, but dont you think that's Jason's call and not ZH's?
Jason is Jason Goepfert the owner of SentimentTrader.
This is uberbullish! Those of you who dont have any other agenda except make money need to dive right in.
"Unexpectedly"? Where have I heard that before? LOL