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PUT/CALL RATIO
The Put/Call Ratio is another analytical tool that should
be used in conjunction with others to help pinpoint stock market tops and
bottoms. It is used as a contrary indicator similar to the way the
Volatility Index is used. A high put/call ratio greater than 1.0 reflects
a very bearish attitude among market participants whereas a low reading
below .40 reflects too much bullishness. The more put volume the
higher the put/call ratio. As a contrary indicator, a very high Put/Call
Ratio (extreme bearish attitude) should be seen as bullish.
It is better to use this
indicator in combination with the Volatility Index which in itself can
be a very reliable indicator of market sentiment. See
Volatility
Index chart. |
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STOCK PICKS seeTECHNICAL
STOCK PICKS |
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