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Put Call Ratio Reaches Extreme Panic Zone at Trader’s Narrative

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Today, the CBOE equity only put call ratio hit 1.22. Which means that for every call there were 1.22 puts.

To find a more extreme reading in this indicator, we’d have to go back to the late summer of 2004 where the S&P 500 found footing at 1065.

On August 6th 2004, the equity only put call ratio hit 1.28 (see graph below):

cboe equity only put call ratio.png

Interesting to note that the S&P 500 today closed very weak, but at around 1460. Just around the top of the previous swing high in mid February 2007. If this area acts as it should, the market will find support here next week.

UPDATE: The data I used for this post was later found to be incorrect. Let that be a lesson (it certainly was for me) to double check your data.

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