Schaeffer's Research has a table showing returns after the spread reached 40%. It did so twice in 1987, weeks of 1/16 and 8/14. Unfortunately he does not mention how high it went after that.
Interesting tables. Like so many indicators, it appears 40-plus is bullish at the beginning of bull runs, and bearish in the end of bull markets. So is this, as the Doors would have it, THE END?
Not a very precise read although in retrospect it appears to be close. Also...hmm...more than 40% on the spread and "seven" ceases to be a lucky number.
Good luck and good trading.
P.S. Also I suspect when a trader and market player as savy as NAV begins to wonder about these things he alone may be a better sentiment indicator than any of this stuff. Just my two cents...
Edited by diogenes227, 01 November 2017 - 10:39 AM.
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).
“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”
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