Total Put-Call Ratio System: Did a Buy Signal Just Occur?

By Lawrence G. McMillan

We have very well-defined criteria for determining a major Total put-call ratio buy signal. These are powerful signals, worth a 100-point rise or more in $SPX.  There have been twenty such signals since the year 2000, of which 11 have produced the desired 100-point gain, and three others produced smaller gains.  The total $SPX points gained from the twenty signals is +960.  So, these signals are not to be taken lightly.  

What happened this week was that the Total put-call ratio came within a whisker of an official buy signal.  The question is, “Can we count this as a buy signal anyway, or must we stay with the strict definition?”...

Read the full article (published on 4/10/15) and get all of the trading recommendations by subscribing to The Option Strategist Newsletter today. Introductory 3 month trial subscriptions are available for only $29.

The Option Strategist $29 Trial

Share this

Option Strategist
Blog Search

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.