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

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

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Bob Brinker Update and Market Statistics For March 22, 2008

According to Peter Brimelow ( Bob Brinker's Low 1300s Buying Opportunity) Bob Brinker rates the market as a buy here in the low 1300s. Brimelow wrote:

• Brinker said recently: "In our view, ..... . We now rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1,300s, or any minor weakness that occurs below that level."

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

In his January 2008 Marketimer, Bob Brinker reported:

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

If the 60-DMA of CPC was bullish at 1.00 for Brinker's model, then it must be raging bullish here at 1.10!

Bob Brinker's S&P500 Buy Levels Charted:



Honey's Bob Brinker Beehive Buzz reported:

In July, 2007 Marketimer, Bob Brinker predicted a "move into the S&P 500 Index 1600's range as we move forward....."
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Kirk Comment: Most of us who know nobody has ever timed the market successfully over the long term HOPE 1256,98 was just a "detour" on the road to 1600s.
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In August, 2007 Bob Brinker said: "We rate the stock market as attractive for purchase on weakness that occurs in the area of the S&P 500 Index mid-1400's. Above that level, we recommend a dollar-cost- average approach."
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Brinker repeated the "mid-1400's" buy signal in September, October, November and December.

For more info, see:

• Tuesday, March 04, 2008:
  Bob Brinker's Low 1300s Buying Opportunity
  .
• Monday, January 21, 2008
  Markets Plunge. Bob Brinker Says "Remain Fully Invested"
  .
• Friday, January 04, 2008
  Brinker's 60-day Moving Average Put/Call Ratio Indicator Remains Bullish
  .
• Monday, December 24, 2007:
  Bob Brinker's Mid 1400's Buying Opportunity
  .

Market Statistics for 03/22/08

Year to date, the S&P500, DJIA and NASDAQ Composite are down 15.6%, 13.4% and 21.1% respectively from their all time highs made in late 2007.

On an intraday basis, the S&P500 and the NASDAQ Composite have been down as much as 20.2% and 24.7% respectively while the DJIA has "only" been down 19.4%, just shy of the 20% decline required for an "official" bear market definition some use.

For full details with charts, see "Market Update for March 22, 2008" at Kirk's Market Thoughts

FIXED INCOME:

The yield curve is very healty for banks with the 30 year T-bond paying 4.17% and the 3-month T-bill only paying 0.61%, a spread of 3.56%.

See: The Yield Curve Spread as a Market Predictor

This sort of a spread usually signals a strong stock market ahead just as the inverted yield curve in late 2006 and early 2007 correctly predicted the recession or near recession we are in now.

From 1/1/1999 through 03/22/08:

Kirk's 80:20 Aggressive Core Portfolio is up 62.6%
Kirk's 50:50 Conservative Core Portfolio is up 67.3%
Kirk's 70:30 Explore Portfolio is up 175.7%

80% Core Aggressive plus 20% Explore is up 85.3%
90% Core Conservative plus 10% Explore is up 78.2%

100% Total Stock Market (VTSMX) is up 35.6%


Since October 15, 2000 when Bob Recommended QQQQ to his investors for up to half their cash reserves, my newsletter "explore portfolio" is up 41.7% while Brinker's QQQQ is down 46.4%!!!

You can see why I recommended and continue to recommend my Explore Portfolio over Bob's QQQQ.

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 March 2008 issue FOR FREE!

More info at:

• Mortgage Rates
• Libor Rates
• Home Equity Loan Rates
• Market Sentiment Indicators
• Major World Market Graphs

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Brinker's 60-day Moving Average Put/Call Ratio Indicator Remains Bullish

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. A high put/call ratio is bullish for us contrarian investors.

The current reading for the 60-day put/call ratio is 1.00.

• 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

This chart shows the sixty day moving average of the equity put/call ratio.

Click chart to see full sized version courtesy of stockcharts.com

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.

Read:

• Monday, December 24, 2007:
  Bob Brinker's Mid 1400's Buying Opportunity

If you want to read what Brinker said in his full update of this Marketimer stock market timing indicators, then you have to subscribe to Marketimer.

You can also read Bob Norton's free "estimate" of what Bob Brinker's timing model would do in "Bob Brinker Shadow Stock Market Timing Model Update." Brinker doesn't say if his individual indicators are bullish or bearish, but it seems Bob Norton made a direct hit with his estimate Brinker would remain bullish and fully invested.

10-day and 60-day Put Call Ratio at Record Highs!

In his September Marketimer, Bob Brinker wrote very highly of the "extraordinary" high levels for the 10-day and 60-day moving average of the CBOE put/call ratio.

Click graph to view full sized

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. A high put/call ratio is bullish for us contrarian investors.

I track the 10-day and 66-day moving averages of the put call ratio. 66 days is three months. As the graph shows, the 66-day and 60-day moving averages are nearly identical and both are at record high levels. This is GREAT NEWS for us bulls!!!

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