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Location: Massachusetts, United States

My "I" is constantly changing (perhaps this is merely AD/HD): overdetermined nexus of cultural forces emanating from several continents: skeptical of all Truths and seeker of the truth: iconoclast by enculturation, brain chemistry, and, perhaps, choice: perpetually perplexed, particularly about why we exist/ as the manifestation of overdetermined forces whose existence (and nature) is not as solid (or simplistic) as we would like.

Saturday, July 22, 2006

Put-Call Ratio Bullish

The number of puts purchased divided by the number of calls purchased is a contrary indicator for the market. As pessimism grows, the put-call ratio rises and the possibilities of a rally increase (because pessimism results in selling and eventually the sellers run out of ammunition, leaving a market weighted in favor of the buyers). Nevertheless, unless you have a friend in the Israeli government or IDF, then this may not be sufficient information to time this market. All the same, volatility can be a good environment to make money, so long as you ground your market activities in the fundamentals (buy cheap stocks of good quality companies and you run less risk).