Jaws II, Blood in the water Options

[IYB]

Viewed together the chart of the 10 dma of the equity p/c ratio and the 10 dma of the OEX p/c ratio look like the jaws of shark, open wide and ready to de-limb his adversary. But seriously, if you were to compute the ratio of bottom chart reading to the top chart reading, at 2.0 this is probably the highest ratio since October 2007- the exact peak. That is to say, normally correct OEX option players are buying puts at unusually high levels while normally wrong equity players are buying calls at unusually high levels, either one a sign of trouble, but together.....well we'll just say there's blood in the water. Just another "flag"....

[attachment=11464:equityPC.png]
[attachment=11463:OEXPC.png]

Sorry the DP charts from 4 weeks ago do not reproduce now in the above post, but you can locate those "jaws" back in early July on the new DP charts above.

The market went sideways a few days then dropped 70 point vs. SPX.



Let me emphasize: Short term I see a similar set up here- though perhaps 40-50 SPX points would contain it at this point, imho. The ratio of oex to equity 10 day readings was then 2.0. Today it is 2.016. Just a comment on short term sentiment. IT and LT is a whole 'nother animal, and that post is not ready yet.

[nimblebear]

im with ya all the way. This is going to get velly velly interesting. Whoever is on the wrong side of this trade will be in substantial pain for quite awhile.

[dowdeva]

Viewed together the chart of the 10 dma of the equity p/c ratio and the 10 dma of the OEX p/c ratio look like the jaws of shark, open wide and ready to de-limb his adversary. But seriously, if you were to compute the ratio of bottom chart reading to the top chart reading, at 2.0 this is probably the highest ratio since October 2007- the exact peak. That is to say, normally correct OEX option players are buying puts at unusually high levels while normally wrong equity players are buying calls at unusually high levels, either one a sign of trouble, but together.....well we'll just say there's blood in the water. Just another "flag"....

[attachment=11464:equityPC.png]
[attachment=11463:OEXPC.png]

Sorry the DP charts from 4 weeks ago do not reproduce now in the above post, but you can locate those "jaws" back in early July on the new DP charts above.

The market went sideways a few days then dropped 70 point vs. SPX.



Let me emphasize: Short term I see a similar set up here- though perhaps 40-50 SPX points would contain it at this point, imho. The ratio of oex to equity 10 day readings was then 2.0. Today it is 2.016. Just a comment on short term sentiment. IT and LT is a whole 'nother animal, and that post is not ready yet.

IYB,

Just eyeballing the rest of the indicators in the last days of June (haven't even looked at 2007), the current situation looks different technically. There was a CCI that could barely get up to the median point before falling back, an MACD that already had had a triple divergence, and was about to fall through the 0 line, and the SPX itself also rallying up to the median line from below, before falling to test the bottom BB band.

Just doesn't look ripe for the fall you're suggesting, except for that p/c ratio. Looks more like the beginnings of one, sort of a bearish 'green shoots', or grass roots, or bear sprouts, or whatever they're calling it these days.

This post has been edited by dowdeva: Jul 31 2009, 11:17 PM

[dowdeva]

Viewed together the chart of the 10 dma of the equity p/c ratio and the 10 dma of the OEX p/c ratio look like the jaws of shark, open wide and ready to de-limb his adversary. But seriously, if you were to compute the ratio of bottom chart reading to the top chart reading, at 2.0 this is probably the highest ratio since October 2007- the exact peak. That is to say, normally correct OEX option players are buying puts at unusually high levels while normally wrong equity players are buying calls at unusually high levels, either one a sign of trouble, but together.....well we'll just say there's blood in the water. Just another "flag"....

[attachment=11464:equityPC.png]
[attachment=11463:OEXPC.png]

Sorry the DP charts from 4 weeks ago do not reproduce now in the above post, but you can locate those "jaws" back in early July on the new DP charts above.

The market went sideways a few days then dropped 70 point vs. SPX.



Let me emphasize: Short term I see a similar set up here- though perhaps 40-50 SPX points would contain it at this point, imho. The ratio of oex to equity 10 day readings was then 2.0. Today it is 2.016. Just a comment on short term sentiment. IT and LT is a whole 'nother animal, and that post is not ready yet.

IYB,

Just eyeballing the rest of the indicators in the last days of June (haven't even looked at 2007), the current situation looks different technically. There was a CCI that could barely get up to the median point before falling back, an MACD that already had had a triple divergence, and was about to fall through the 0 line, and the SPX itself also rallying up to the median line from below, before falling to test the bottom BB band.

Just doesn't look ripe for the fall you're suggesting, except for that p/c ratio. Looks more like the beginnings of one, sort of a bearish 'green shoots', or grass roots, or bear sprouts, or whatever they're calling it these days.

OK, so now I'm confused. I just took a look at your post again, and in you quote early July as the preceding jaws of death scenario, but in the chart you point to early June, in which case, cancel my last thought.

[IYB]

OK, so now I'm confused. I just took a look at your post again, and in you quote early July as the preceding jaws of death scenario, but in the chart you point to early June, in which case, cancel my last thought.

Sorry, my bad. It's "aloha Friday" and mai tai's are just a buck 'til 10 PM in Waikiki. I meant Jun 6, 2009.

This post has been edited by IYB: Jul 31 2009, 11:38 PM

[Will]

Thanks IYB. Here is the ratio of the two ratios:

[IYB]

Thanks IYB. Here is the ratio of the two ratios:

Perfect Will! Mucho Mahalos!! Over 2 is very toppy, as your chart indicates. How the heck did you do that?? Regards, D

This post has been edited by IYB: Aug 1 2009, 12:03 AM

[Will]

Perfect Will! Mucho Mahalos!! Over 2 is very toppy, as your chart indicates. How the heck did you do that?? Regards, D

The symbol for 10 day OEX PCR is !10PCROEX and the symbol for 10 day equity PCR is !10PCREQU. If you enter !10PCROEX:!10PCREQU in the symbol box on DP or stockcharts you should get that chart.

Looking back at the chart from 2003, it looks like in a bull market this number can stay upwards of 2 for a while.

This post has been edited by Will: Aug 1 2009, 12:08 AM

[IYB]

Perfect Will! Mucho Mahalos!! Over 2 is very toppy, as your chart indicates. How the heck did you do that?? Regards, D

The symbol for 10 day OEX PCR is !10PCROEX and the symbol for 10 day equity PCR is !10PCREQU. If you enter !10PCROEX:!10PCREQU in the symbol box on DP or stockcharts you should get that chart.

Looking back at the chart from 2003, it looks like in a bull market this number can stay upwards of 2 for a while.

Thanks again Will. And I agree that bull market rules are different than bear market rules - context is everything as I always say.

How do you get the symbols for each indicator? I've been wanting to get the individual charts for the McO volume readings for various indicators, and to run then against 6 ema's. Can you add 6ema (for example) to the DP charts? Looks like my weekend just filled up with a whole new line of research.

Best, D

This post has been edited by IYB: Aug 1 2009, 12:16 AM

[Gogal]

How do you get the symbols for each indicator? I've been wanting to get the individual charts for the McO volume readings for various indicators, and to run then against 6 ema's. Can you add 6ema (for example) to the DP charts? Looks like my weekend just filled up with a whole new line of research.


Hi IYB,

First of all thanks for providing the insite about the market. Regarding the decision point symbol list, it available at

http://www.decisionpoint.com/prime/dailych...ymbolsTool.html

Once you have the symbol you are looking for, using the ChartTool you draw EMA or any other indicators.


Regards