Traders look at these Ratios in an endless quest to find
market direction, the premises are that when the majority of the market participants
are thinking in one direction, the market will go the other way.
You can find several interpretations of the ratios, although
they are NOT market timing indicators, as contrarian ratios let’s say they put
you on alert.
The AAII survey, what the experts say:
When AAII is over 60% bullish, it’s the time you start looking
for shorts and closing your longs. Near
50% some worries. Only guidelines.
The CBOE equity put/call Ratio, what the experts say:
A ratio higher than 1.00 is a buy signal, lower than 0.75 is
a sell signal.
You can smooth it with a ema.
Good luck and happy Hanukkah and Christmas
No comments:
Post a Comment