Low Put/Call Ratios

Instead of the long Twitter threads like I have been doing, I am going to start doing small blog posts instead. A much easier way to make a quick point, and will get my blog more active again. I have been working on some deeper blog post topics, and hopefully, I will get them done soon. This blog is pretty low on my priority list, but I am getting closer to having time to focus on it for a while.

There has been a lot of talk about the low PC ratios in the last few days. Low PC ratios are like Breadth divergences and many other metrics that can be used to weigh the odds of a top. They are often seen at tops, but not every low PC ratio forms a top. Often it isn’t the initial low PC ratio that is the concern, it is when that ratio starts to rise off of a low level and diverge from the price that is more often the concern. This concept comes from Andrew Thrasher, who’s blog is gold IMO. This particular post is here: http://www.athrasher.com/interpreting-the-put-call-ratio-what-many-misunderstand/

Also, I do think it is possible to look more deeply into the options data and see a bit more granular view. This can be done with the data from https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics which Sentimentrader.com uses to build the Options Speculation Index, the Retail-Only Buy to Open P/C Ratio and the Large Only Buy to Open P/C ratio. This is a far superior method to looking at the Options data. This currently is aligned in a posture that has been pretty extreme bullish for a few months…