The Put/Call Ratio as a Market Tell

What is the current signal? Part Deux

Remember we posted the below substack on August 27th to give readers a sense of where the market sentiment sat. (We explain the put-call ratio below for subs).

At the time, the 5, 10 and 20 day average put-call ratios rang in at 1.06, 0.97 and 0.85. The QQQ rallied from $364.02 at the 8/25/2023 close to a high of $377.59 on 9/1/2023. Right now you ask? The 5 day put call is 1.05, the 10 day is 1.02 and the 20 day is almost 1.0. Yes, market pundits are warning the next couple of weeks are tough seasonality. At the same time, the market inflicts the most pain on the largest number of players in the shortest span of time. Admittedly, it is difficult to find “clean longs” at reasonable valuations. But, if you have them, it is likely a good spot to be adding. You know our favorites by now.

In summary, the put-call ratio is saying buy not sell, despite how awful the market has felt in the past week or so.

Rob’s Educated Guesses

August 27th, 2023 post below.