Extreme complacency is a major warning sign ! I have used the put call ratio to identify some very extreme readings in market sentiment.
ONLY UP FROM HEReEvery time the RSI reached extreme levels on the Put Call Ratio,We reached the call or put extreme.In this case,the RSI reached the overbought level,which only happened on 2 occasions during the last 15years,means majority of participants are already short.Since equities prices are always on the hun
Once in 3 year signal gives you the big pictureI've analyzed the putcall ratio in this video to show how valuable the sentiment is in determining the direction of the market.
Record levels of complacency means market topping outIn this post, I have shown the put-call ratio which is a reliable measure of sentiment in the market. When everyone is optimistic, that's typically when the market tops out.
Sentiment switch from panic to complacencyAfter the selloff in early August due to the Yen carry trade, panic levels exploded. However, over the past 3 weeks, the market is back to extreme complacency and that's not a good sign for the bulls.
Extreme complacency is a major warningThe analysis done here shows extreme complacency in the market which is indicating a top could be forming. When everyone is bullish you have to be worried.
Extreme Panic in Put/Call Ratio = Bottom in Equities soon?Yesterday's spike in the CBOE Put/Call Ratio brings it closer to the spikes seen during Covid fall and the December '22 bottom. This is a sign of extreme panic and we could be very near to the bottom in US Equities.
SPX as of 4th Oct closing = 4263.76
Pre FOMC quick takeAll in the video, I cover a few of the sectors and point out this area has been tough resistance for the market in the past. Noone seems to be expecting more problems with the banks, which to me is sort of strange as we don't know the full fall out yet.
Good luck tomorrow - FOMC at 2pm and 2:30 p
PCC & QQQ: PUT TO CALL RATIO / MARKET BOTTOM NEARING???DESCRIPTION: In the chart above I have included an overlapping analysis of PCC which is a PUT TO CALL RATIO INDICATOR & QQQ a LEADING INDEX in the OVERALL MARKET.
POINTS:
1. A PUT TO CALL RATIO LEVEL OF 2:1 HAS ALWAYS BEEN INDICATIVE THAT A MARKET BOTTOM IS NEARING OR IN.
2. MACD is has official
Is this level of pessimism justified ?The put/call ratio is at extreme levels which is reflecting a very pessimistic sentiment in the market. Typically, this indicator is to be used as a contrarian signal which means some sort of a major bottom could be forming over the next couple weeks.
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Displays a symbol's price movements over previous years to identify recurring trends.