It is my duty to bring you, my dear patrons, the freshest and most reliable information with respect to the markets available. That is why I am persistent in my chase to dig deep into areas that few others bother to look. I am not simply going to sit here and show you a head and shoulders pattern, followed by a couple moving averages, giving you a elementary summary of what it is the markets are slated to do. The kiddie pool is over there. This is an arena for dignified adults seeking stimulation of the mental variety that reverberates into exquisite displays of prosperity if executed properly.
With that said, I bring you my most recent postulation. The following study is the cousin of a study I posted on January 31st, 2012 titled, “A Fascintating Interpretation Of The VIX & Put/Call Ratios: Volume 2.” The basic premise was that during bull markets put/call ratios and the VIX are no longer contrary indicators but rather serve little purpose other than to create conversation among pseudo-market intellectuals of which there are many in financial social media circles.
In this study we look at both the Dow and short-term moving averages of the put/call ratio to gauge sentiment. There are some striking similarities to January of this year when another rally was just on the verge of getting underway.
click chart to enlarge