Search Bob Brinker Fan Club Blogs

Wednesday, April 09, 2008

Put Call Ratio 60 Day Moving Average Record High

One of Bob Brinker's sentiment indicator components is what he calls the "60-day put/call ratio." The CBOE (Chicago Board Options Exchange) Put/Call Ratio (CPC) is the ratio of the trading volume of put options to call options. Bearish investors buy put options that gain in value when the market goes down. Bullish investors buy call options that gain in value when the market goes up. According to Bob Brinker, a high 60 day moving average of the put/call ratio is bullish for us contrarian investors.

The 60 day moving average (60-DMA) of the CBOE Equity Put/Call ratio ($CPC) remains near at a record high of 1.10 as shown on this chart.


Click charts courtesy of stockcharts.com to view full sized images

On January 04, with the 60-DMA of the put/call ratio at a then record of 1.00, we reported here that Bob Brinker said this was bullish.

In his January Marketimer, Bob Brinker reported:

    "The 60-day put/call ratio remains in bullish territory as the new year begins."

Brinker remains bullish, does not expect a bear market (as defined as a 20% or more decline in the S&P500) and he looks for new highs to be made in the year ahead.


On an intraday basis, the market declined 20.2% and the put/call ratio is 10% higher at the current record level of 1.10.

Some Historical Perspective:
  • In January 2000, when Brinker last lowered his asset allocation to equities , the 60-day put/call ratio was 0.525
  • In March 2000, when the S&P500 peaked before the 2000-2002 bear market, the 60-day put/call ratio was all the way down to 0.475.
  • In November 2002, shortly after the markets bottomed in October 2002, the 60-day put/call ratio was 0.86
  • In March 2003, when Brinker returned to a fully invested position, the 60-day put/call ratio was 0.82

Here is a chart of the put/call ratio back to 1998.



For more information, see Technical Analysis: Sentiment Indicators

= = = = = = = = = = = = = = = = =

Click to view the attached (but slow to load) PDF file: Take Profits & Sell Sentiment Indictors from The Market Top.

If you want to know what I have been buying in this period of weakness with my profit taking dollars from selling when the market was higher, Subscribe to Kirk's Investment Newsletter TODAY and get the April 2008 issue FOR FREE!

We email regular "FREE Bob Brinker Fan Club Updates" to everyone on our "Bob Brinker Fan Club" distribution list. If you would like to get on this list, then click this link.

No comments:

Post a Comment

FREE Updates Mailing List


We email regular "FREE Bob Brinker Fan Club Updates" to everyone on our "Bob Brinker Fan Club" distribution list. If you would like to get on this list, then click this link.


Top Rated Newsletter


Timer Digest Features
Kirk Lindstrom's Investment Letter
on its Cover

Cick to read the full page article!






US Treasury Rates at a Glance - iBond Rates - LIBOR Rates

Must Read:
Beware of Annuities - Payday Loans Warning