The SIR Equity p/c ratio has come off its highs from the 0.73 range. As seen by the graphic below, these peaks marked perfect bottoms over the last three years.
The growing concern now is that the p/c ratio has stopped declining and may have put in a bottom on December 5 (second graph).
The final graph is a forward weighted moving average, which confirms the second graph that a bottom could be forming.
Our interpretation has been a declining SIR p/c ratio is bullish while a rising one is bearish. At this moment, it appears that we may be transitioning from a declining ratio to a rising ratio.
Given that the market (SPX) has stalled since late November, option players seem to be adjusting positions.
The growing concern now is that the p/c ratio has stopped declining and may have put in a bottom on December 5 (second graph).
The final graph is a forward weighted moving average, which confirms the second graph that a bottom could be forming.
Our interpretation has been a declining SIR p/c ratio is bullish while a rising one is bearish. At this moment, it appears that we may be transitioning from a declining ratio to a rising ratio.
Given that the market (SPX) has stalled since late November, option players seem to be adjusting positions.
1 comment:
Another excellent chart.
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