Jun
17

Intraday Update (Short-term Implications of Today’s Spike in the CBOE Equity Put/Call Ratio)

By on Wednesday, June 17th, 2009 at 1:24 pm

Currently the CBOE equity put/call ratio is running at .88, its highest level since March. With the S&P hovering near unchanged levels, I thought it would be interesting to look back at times when the S&P closed higher on a day when the equity put/call ratio closed at a relatively high level (I used .75 for this study)…

CBOE Equity Put/Call Ratio >0.75, S&P500 Closes Higher
03/06/09… Lower S&P close one session later
03/04/09… Lower S&P close one session later
02/12/09… Lower S&P close one session later
02/11/09… Lower S&P close two sessions later
01/21/09… Lower S&P close one session later
01/16/09… Lower S&P close one session later
01/15/09… Lower S&P close two sessions later
01/13/09… Lower S&P close one session later
01/08/09… Lower S&P close one session later
12/12/08… Lower S&P close one session later
12/10/08… Lower S&P close one session later
11/21/08… no lower SPX close within two days
11/18/08… Lower S&P close one session later
11/13/08… Lower S&P close one session later
11/07/08… Lower S&P close one session later
10/23/08… Lower S&P close one session later
10/16/08… Lower S&P close one session later
09/26/08… Lower S&P close one session later
09/18/08… no lower SPX close within two days
09/16/08… Lower S&P close one session later
09/12/08… Lower S&P close one session later
09/11/08… Lower S&P close two sessions later
09/10/08… no lower SPX close within two days
09/08/08… Lower S&P close one session later
09/05/08… Lower S&P close two sessions later
08/26/08… no lower SPX close within two days
07/22/08… Lower S&P close two sessions later
07/16/08… no lower SPX close within two days
07/10/08… Lower S&P close one session later
07/03/08… Lower S&P close one session later

Note that in 25 out of the last 30 occurrences, or 83% of the time, the S&P posted a subsequently lower close (below the setup day) within the next two sessions. That’s well above the 65% at-any-time odds for a lower S&P close within two days in the same time frame.

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