Next Overlapping Nodes on $NDX - 3/11/10

[Mark Lytle]

This doesn't mean a trend change on this date, but like the December 28th warning which materilized after two weeks, this may do something similar...it could, however, also be early...it's random...

[Steven Vincent]

Here's the OEX:

http://www.schaeffersresearch.com/cfxtemp/CFT0306_195640340.jpg

[Steven Vincent]

The important thing is that you cannot derive any real conclusions from closing price alone, which gyrates wildly all over the map. You have to smooth the data with a moving average. Even the short term 10 day MA is showing persistent fear, if PCR is an effective gauge of that. This is rocket fuel for another leg higher. When it bottoms yes there will be a selloff.

[Steven Vincent]

Total PCR 10 day MA:

Equity PCR 10 day MA:

Index PCR 10 day MA:

[Steven Vincent]

Here's another one with a 3 month window. They use the 20 MA though I like the 14 day.

[Mark Lytle]

The PCR data has anywhere from few days to a couple or three weeks before it would reflect any effects from the double exponential node... It may change over that time period...These wave derived maths are not 100%, but the double node is one of the strongest warnings...

[Steven Vincent]

Here's another view which tends to suggest the PCR is unusually high given the rally that we have had:

http://www.indexindicators.com/_charts/sp500-vs-put-call-ratio-equi...

[Steven Vincent]

Thanks for posting that. My PCR data for SPX is showing persistently high ratio in closing price and 14 day MA, which should keep the market moving higher. Not sure why the discrepancy.

[Mark Lytle]

Supporting sentiment data: