Fuente: Ryan Detrick
Friday saw some extreme readings in sentiment, which brings the question is there enough fear out there to form a major low?
For starters, the CBOE options equity put/call ratio spiked clear up to 1.04 on Friday. As I discussed here, this is the highest level in three years and 19th highest reading since 2003. Remember, when everyone is trading bearish puts that could be a sign of extreme fear in the options market. From a contrarian point of view, that could be a bullish sign.
The ISE Sentiment Index saw similar action, as its proprietary call/put ratio registered the second lowest reading ever! This ratio looks at just customers opening long positions, so it is a fairly true gauge for the overall action. Again, this ratio was very low, which suggests buying puts over calls was near historic levels.
Now what throws a real wrench into the whole thing is there were rumors some of those trades on Friday weren’t legit and were ‘fat finger’ trades. Reuters summed it up here, but as of now the trades appear they’ll count. They just might need to have a big asterisk next to them.
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