Put/Call Ratio Signal – 03/08/23

Investors’ Business Daily uses Put/Call (PC) ratio moves above 1.15 as a sign that U.S stocks could be near a bottom.   Today 03/08/23 for the second time in just nine trading days P/C went above 1.15.  U.S stocks could  near a bottom. 

The daily PC and S&P 500 (SPX) chart courtesy of Trading View illustrates their relationship since December 2021.

Note – PC is not a Trading View indicator, it can be accessed by typing in the chart symbol PC.

Since December 2021 there have been 21 times that PC has moved above the 1.15 level.  The green arrows indicate the times when the SPX went lower for at least a few trading days before making a bottom.   Even on the instances when it could be argued the PC signal was ineffective, the SPX declines were relatively small.   

What’s curious about the 03/08/23 signal is that the SPX ended the session up from the prior trading day.

Recently the U.S Federal Reserve chairman made comments about future interest rate increases.  The  release of the U.S February payroll report is on 03/10/23.  Perhaps the bears are expecting a big drop in U.S stocks after the 03/10/23 report.  If U.S stocks do decline – PC readings above 1.15 suggests that the drop could be brief and small.     


Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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