About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Sunday, August 09, 2015

Stock Market Sentiment

In measuring market sentiment, I prefer to watch the equities put / call ratio simply because
it reflects real money down on the table and not advisory opinion where many of those polled
may have no 'skin in the game'. $CPCE Dailyhttp://stockcharts.com/h-sc/ui?s=%24CPCE&p=D&yr=5&mn=0&dy=0&id=p62224920975

I use the put / call as an inverse indicator which becomes interesting at extreme levels. The current
chart shows a recent very sharp rise in the put / call ratio as players have become rapidly more
bearish on the outlook for stocks based on the 30 day m/a. I classify the stock market as oversold
when the 30 day p / c ratio rises above .70. This measure may obviously go higher particularly if
the market weakens in the short run, but note that a .70 plus has often signified that a positve
price reversal lies not too far ahead.

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