The Put/Call ratio is indicating the stock market is materially oversold – primed for a bounce.

Merrill Lynch reported yesterday that the ratio of puts to calls on the CBOE is approaching extremes last seen in May 2010 and late 2008.  The hedgies have been busy!  While this ratio can be “noisy” it is a pretty good indicator at extremes – like now.  The Q2 earnings season is fast approaching.  Stronger earnings and a likelihood for a more positive tenor to macro-economic metrics could cause a significant stock market rally and confirm the signal from the option pits.  Jeb Terry, Sr. June 13, 2011

Aberdeen Investment Management – a guide service for micro-cap technology investment

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