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"Smart Money" Options Indicator Has Never Been More Bearish
For the first time ever, S&P 100 traders are holding more than 3 put options for every call.
Most of the sentiment and position metrics that we monitor, and highlight on the pages, are viewed as contrary indicators. That is, once they reach an extreme, investors or traders would be wise to act “contrary” to the extreme. In other words, the crowd is wrong at extremes. At least that is generally the case, historically speaking. There are a few exceptions to that rule. One such exception can be found in the traders of S&P 100, or OEX, options. Historically, this group has been on the right side of the market more times than not when their collective options position is at an extreme. This may be something to take note of as OEX traders have never held more put options relative to call options as they do right now.
Specifically, when measuring the open interest in OEX options, Friday’s readings marked the first time ever with more than 3 put options for every call option. Today’s reading came in even more extreme at 3.3 puts for every 1 call. A look at the chart over the last 16 years illustrates truly how extreme these readings are.
As we noted in our last update on this indicator in April, these elevated readings have become more frequent as well as more extreme. It used to be that we viewed readings above 2.0 as extreme. From 1999-2014, there were just 15 days that registered a reading above 2.0.
What is so significant about those extremes in OEX open interest put/call readings? They were almost all accurate in forewarning of struggles in the stock market. In late 1999 and mid 2007, the extreme readings preceded cyclical market tops. In mid-2011, the extreme occurred prior to the sharp summer decline. And while readings in June 2003 and late 2014 did not precede major weakness, the stock market did stagnate for several months following. Perhaps only an occurrence in January 2012 proved to be a complete bust as a warning sign.
Then, there’s 2015. After 15 readings above 2.0 in 15 years, there have been no fewer than 166 readings that high so far in 2015. What gives? Either it truly is “different this time”…or this is an unprecedented red flag waving in front of us.
One factor that has been brought up in regards to the indicator and its potential effectiveness is volume. While OEX used to be a standard-bearer in terms of an equity index options contract, this is no lnger the case. Volume is a fraction of what it once was. This seems like a genuine reason to treat the signal with a grain of salt. That said, volume has been dwindling for years and, for the most part, the signals have remained pretty accurate.
So what’s our takeaway? With OEX volume as depressed as it is now, the bearish connotations of an elevated reading in the OEX open interest put/call ratio are perhaps mitigated to a degree. Even so, when we see readings so far stretched beyond even former extreme levels, we still think it’s worthwhile to take notice. As we said in the April post, looking at the current readings on the chart is like looking at Wilt Chamberlain’s 4th grade class picture.
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OT: One afternoon, whilst trying to Zero-in on the source of the worlds problems, I drifted to that of the dual-passport holding type nature. I began to reflect on a clip of a movie entitled "The House of Rothschild". Specifically the Battle of Waterloo and the resulting dip in the London Stock Exchange in which Nathan Mayer Rothschild supposedly manipulated information concerning the outcome of the battle, resulting in the cornering of the market.
I began to wonder, why has no one re-made this movie? Would the Zionists allow such a thing to exist today in an industry they are widely known to control?
As my memory banks went into overdrive, I had a revelation. Trading Places, with Akroyd and Murphy.
Now in the movie the Dukes were trying to corner the orange market. Was orange a metaphor for the Amsterdam Stock Exchange? In 1815 The Netherlands was kind of a mess economically and would have just reorganized into United Kingdom of the Netherlands (1815–1839).
Not sure about the orange market but the Prince of Orange played a decisive role at Waterloo, with some having Napoleon credit him personally, And the House of Orange-Nassau controlling the Netherlands, aka The Amsterdam Stock Exchange.
So far in the movie we have the plot of very time sensitive information relating to the stock market.
The cornering of a stock market.
Louis Winthrope III not marrying the wealthy and connected Penelope, but instead, a whore.
The closest connection I could make was that William II did not marry Princess Charlotte of Wales, but instead Grand Duchess Anna Pavlovna of Russia. If the characters of the Dukes, Valentine, and Winthorpe are objects of symbolism, I am not good enough to identify them all.
To further fuel my conspiracy, at 18:14 in the movie the Dukes are hatching their scheme in front of three portraits on the wall. The one on the left could pass for William II of the Netherlands and the right painting of William III.
http://s12.postimg.org/jn3co7jvh/the_plan.png Right after Louis is apprehended for theft they show 3 paintings, the first two I can't I dentify, but the third is JP Morgan. Wasn't Morgan basically a Rothschild agent who helped steal a country? http://s3.postimg.org/a8jckkehf/man_1.png http://s12.postimg.org/5pprwnb6l/man_2.png http://postimg.org/image/44ai4u0yh/ Speaking of, Isn't a red shield their mark? http://postimg.org/image/tzl81ajwv/ And for desert, what conspiracy is complete without the mandatory 9/11 tie-in. At least 3 times in the movie does 9/11 appear backwards. Opening scene with a newspaper covering a bum. http://s10.postimg.org/c86v1qf7t/9_s_1.png The number above the room. http://s17.postimg.org/augngi7fz/9_s_2.png The taxi rates posted on the door. http://postimg.org/image/dlow9zijp/ And to make it even worse, while Murphy and Akroyd are securing Mr. Beaks there is a single scene With Coleman holding a gun. Behind him is a package that you cannot fully see. It has FRAGILE written in black marker in the top left. You cannot see the full address, but the destination is.....Sandy Hook, NJ. When the angle changes the box is different with the FRAGILE in marker replaced with a red FRAGILE sticker in its place. You cannot see the Sandy Hook address here. I know, I know. Differen't Sandy Hook. http://s30.postimg.org/ekrzzfe69/fragile_1.png http://s3.postimg.org/gdtp08h1v/fragile_2.png Take note that when Murphy says "We gotta kill em'!", you happen to see the words...Two World Trade Center. http://s27.postimg.org/rihuhei77/wtc_2.png And now that I have totally shredded on of my favorite films of all time. Back to the shot of the cab rates. Note the name of the cab company. It's Love Taxi, but above that it is Rum Cab Corp. Just above that and to the left are the numbers 110 colored red. Anyone ever seen The Shining? Red - Rum. You don't even really see the numbers, you just think red. Then Rum. http://postimg.org/image/dlow9zijp/ If you were to read it as a sentance from right to left it reads, proc bac mur der (counting the numbers as it's color). If there is something there other than a loose "pro murder", I cannot see it. Thoughts?">http://s12.postimg.org/jn3co7jvh/the_plan.png
Right after Louis is apprehended for theft they show 3 paintings, the first two I can't identify, but the third is JP Morgan. Wasn't Morgan basically a Rothschild agent who helped steal a country?
http://s3.postimg.org/a8jckkehf/man_1.png
http://s12.postimg.org/5pprwnb6l/man_2.png
http://postimg.org/image/44ai4u0yh/
Speaking of, Isn't a red shield their mark?
http://postimg.org/image/tzl81ajwv/
And for desert, what conspiracy is complete without the mandatory 9/11 tie-in.
At least 3 times in the movie does 9/11 appear backwards.
Opening scene with a newspaper covering a bum.
http://s10.postimg.org/c86v1qf7t/9_s_1.png
The number above the room.
http://s17.postimg.org/augngi7fz/9_s_2.png
The taxi rates posted on the door.
http://postimg.org/image/dlow9zijp/
And to make it even worse, while Murphy and Akroyd are securing Mr. Beaks there is a single scene With Coleman holding a gun. Behind him is a package that you cannot fully see. It has FRAGILE written in black marker in the top left. You cannot see the full address, but the destination is.....Sandy Hook, NJ. When the angle changes the box is different with the FRAGILE in marker replaced with a red FRAGILE sticker in its place. You cannot see the Sandy Hook address here. I know, I know. Different Sandy Hook.
http://s30.postimg.org/ekrzzfe69/fragile_1.png
http://s3.postimg.org/gdtp08h1v/fragile_2.png
Take note that when Murphy says "We gotta kill em'!", you happen to see the words...Two World Trade Center.
http://s27.postimg.org/rihuhei77/wtc_2.png
And now that I have totally shredded on of my favorite films of all time. Back to the shot of the cab rates. Note the name of the cab company. It's Love Taxi, but above that it is Rum Cab Corp. Just above that and to the left are the numbers 110 colored red. Anyone ever seen The Shining? Red - Rum. You don't even really see the numbers, you just think red. Then Rum.
http://postimg.org/image/dlow9zijp/
If you were to read it as a sentence from right to left it reads, proc bac mur der (counting the numbers as it's color). If there is something there other than a loose "pro murder", I cannot see it.
Thoughts?
So the market is going to go up before it goes down. In order to shear the biggest percent of the flock.
Way to fuck up my edit. Twat.
Drop a long off topic comment, and be first in line, and anything can happen...including someone replying to your OT comment.
Whocouldhaveknow?
Yes, I understand that. But his comment is not relevant to mine. Now it looks like shit, I can't fix it and likely won't be read.
I put about 5 hours into that.
HOLD ON. I'll call the WAAAAAAAAAAAAAAAAAMBULANCE for you.
P.S., Like anyone was going to read your off topic gibberish in the first place.
First of all, it's not gibberish.
Second, that is not how you use P.S.
Third, Whambulance is confined to use by little keyboard tick-turds like yourself. Thx for the conformation.
LOL
Your childishness has made my day! How old are you? You do know this site is for adults, right?
P.S. thx is not a real word, and what is a Crab Company???? HA!
So, as you proclaim the site is for adults, you taunt me?
"'Cause they're waiting for you at Bellevue, with their oxygen masks..."
I read it....well, most of it. You lost me when I was instructed to read something backwards....or was that inside out?
It was a good example of correlation until you jumped the shark.
Reading backwards is not really required. Just looking at the picture will suffice. It's the word Murder, that is backwards. If there is more there, I cannot see it. There are two sites i could discuss this at. Here, and Godlike Productions, which actually give conspiracy a bad name.
5 hours to try and get your 15 minutes of fame? Try harder. Maybe 10 hours next time!
Jesus. What an asswipe.
Flagit, take your idiotic trolling somewhere else. NOBODY is loggging into a ZH article to read your idiotic diatribe, you obviously worked on this idiocy for five hours, then posted the first comment without even bothering to read the ZH article, all so you could make sure your idiotic post was first. The very definition of pathetic.
YOU ARE A FUCKING WORTHLESS PIECE OF SHIT.
ooooo big man
go fuck yourself
Hey CD, HOW DARE YOU POST AHEAD OF ME!!!
YEEEEEEEEEEEEEEEEEEEEEAAAAAAAAAAAAAAAAAARRRRRRRRRRRRRRGHHHHHHHHHHHHHHHHHHHHHHHHHH
(my best Internet Howard Dean)
Heywood? Heywood Jablomie?
The producer of Trading Places was Aaron Russo, who had a reputation as a truth teller.
Search his name on youtube, and you can spend a day going down the rabbit hole.
https://www.youtube.com/watch?v=Axz6xkWowZk
I watched Freedom to Fascism, and am also aware of his problems with the IRS, which was probably the reason he made FtF.
I am also aware of his relationship with a Rockefeller, which he claimed to be told this information. The question started out as "Is Trading Places a remake of The House of Rothschild"?
Then I started finding 911 and Sandy Hook references.
My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.wallstreet34.com
You are a blessed relief from Flagit's comments
HAHA
I am well aware of the joo dick suckers and their personal quest to flame me.
Flame on faggots.
Stormfronter?
Get back on the short bus little boy.
You need to get out more.
Which is clearly bullish
Meanwhile, NASA now claims burning fossil fuels causes GLOBAL COOLING......"settled science" anyone?
Settled Science = Ministry of Truth
http://www.express.co.uk/news/uk/628524/Climate-change-shock-Burning-fossil-fuels-COOLs-planet-says-NASA
Options are insurance. The sellars, insurance salesmen aka options market makers, make sure that 85% of options expire worthless. 3.2puts per call is BULLISH.
If this is news to anyone look up "max pain theory in options."
That's a pretty decent leading indicator chart.
Cover the up the 2015 portion of the chart. It's still all-time bearish. So if you had bought puts throughout the the past year as the indicator got more and more bearish, holding to sell only after the big crash, you'd have lost money all the way.
Where we are now at the beginning of 2016 could be the same as where we were at the beginning of 2015. The chart doesn't predict the crucial question of when the market will crash, only that it's wound up to. But we knew that already.
exactly. The charts don't indicate if anyone made money from these extreme positions - only that they existed and some time later the even happened. It's the Heisenberg principle all over. You can predict position or velocity of a particle in a relativistic system - not both. For the markets, you can predict level, you can predict time - but not both toghether. I suspect that all that chart shows is "being early is the same as being wrong".
I stand by my hypothesis that the market will be held stable / sideways (likely above 2000) until the new year (so that the boyz and gurlz get their 2/ 20 pay outs). We won't see any meaningful correction until liquidity is pulled from the system. And the reverse repo numbers show that this isn't happening. The rates are being put where they are by an arbitrary change to the NY Fed Deposit Rate (interbank loans have to meet or exceed this rate or lending banks will deposit and not lend to other banks).
Was hoping to talk about options, instead some nutcase posts a crazed rant.
But...but the off-topic "crazed rant" took him 5 hours to carefully craft, and then who knows how many hours he spent continually refreshing the ZH website waiting for a new article, any article, to pop up so he could control-v his comments at the top, where such brilliance rightfully belongs.
Have a little respect, bro.
The short version is that there are so many puts out there you are almost guaranteed a rip-your-face-off squeeze in the next few days, assuming the world doesn't actually end in which case your puts are worthless anyway
That's exactly what I posted most succinctly in the first on topic reply to the article.
Nutcase huh.
Who is the one talking about fictional paper money in a rigged market?
Lighten up Francis. Take a deep breath and get over yourself.