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Chart of the Week: The 10 day moving put/call ratio hit

Posted By Barry Ritholtz On November 18, 2004 @ 11:11 am In Markets | Comments Disabled

Several indicators suggest we are somewhat overdue for a pullback.

The 10 day moving put/call ratio hit its lowest level in over a year; Other indicators we track all suggest that the broad post-election enthusiasm has reached a short term peak; That simply implies that the present overbought condition (and somewhat complacent sentiment) needs a little backing and filling to cool the fires down.

Several other indicators warrant caution here: The Arms index (10 day MA) is at 0.96, the VIX is a 13.25, AAII sentiment is near 60%.

None of these are fatal to the advance, they merely suggest a pause beginning sometime over the next 10 days would be well warranted.

All of the factors we mentioned previously — an underinvested hedge fund community, seasonality, cash on the sidelines and mutual fund performance anxiety — suggest that the retracement will be mild and relatively short in duration.

Put Call Ratio, 10 Day Moving Avg (click for larger chart)

10_day_moving_avg_put_call_ratio [1]

Source: Redwood Technimentals

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Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/11/chart-of-the-week-the-10-day-moving-putcall-ratio-hit/

URLs in this post:

[1] Image: http://bigpicture.typepad.com/photos/uncategorized/10_day_moving_avg_put_call_ratio.jpg

[2] What’s Behind Edward C. Prescott’s Nobel Prize?: http://knowledge.wharton.upenn.edu/index.cfm?fa=printArticle&ID=1082

[3] Alleged Microsoft Cover-Up: http://www.internetnews.com/ent-news/print.php/3437251

[4] TiVo Will No Longer Skip Past Advertisers : http://www.latimes.com/news/local/la-et-tivo17nov17,0,927837.story?coll=la-home-headline

[5] US Finds Possible Mad Cow Case in Inconclusive Test: http://www.bloomberg.com/apps/news?pid=10000103&sid=a6GYB9J90RJ0&refer=us

[6] ETF Investors Going for Gold: http://www.thestreet.com/_googlen/funds/gregggreenberg/10195123.html

[7] Humans Were Born to Run: http://news.nationalgeographic.com/news/2004/11/1117_041117_running_humans.html

[8] Abraham Lincoln: http://www.whitehouse.gov/history/presidents/al16.html

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