The above measure's somewhat tarnished record the past nine months notwithstanding, we see the concentration of participation backing the market's advance has reached a point whereupon the market often soon afterward comes under pressure. We see a certain similarity here to developments leading to 2011 peak, as well.
That's right, a certain similarity to developments leading to 2011 peak here, too. We've been noting the Put/Call ratio's "elevated temperature" these past couple weeks. It's continuing, and this while the weight of upside participation is as good as it gets. Thus we still see elevated risk of significant selling near-term.
* * * * *© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.
Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.
Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.
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