SPY Blocks Massive at 281.00 and Put Call Ratio Hit Extremes
During the “LIVE” broadcast Wednesday, August 15, we discussed SPY and the extreme level that the put call ratio registered (1.47). We also felt that there was a high probability that stocks would reverse soon. IBD50 stocks showing a relative strength would likely follow through on Thursday.
Put Call Extreme – CPC
The put call ratio registers investors sentiment (fear/greed) very effectively. Wednesday saw this indicator peak at 10:00 AM printing (1.47). That was enough for us to look for reversals in VIX VXX and similar fear indicators. More puts were being bought relative to calls. We also watched IBD50 stocks on the watchlist.
Note the green arrow top right.
This elevated CPC equates to extremes where price reversed in the past.
SPY reversed at 281.00 (+/-) as buyers rushed in at this key level. Look left, where Volume by Price histogram (VBP) indicates support (dashed HL).
SPY Massive Blocks at 281.00
Compunding all of this was the massive blocks intraday and institutional activity after hours. We rarely see 3 million shares blocks during the regular session. Institutions have been hiding these trades after hours. The significance seemed noteworthy.
Pre-market inidcates a bullish open. Most of the IBD50 stocks we mentioned as potential candidates, especially those that pulled back are higher this morning.
We felt this pull back seemed odd and that these stocks could up so much on Tuesday only to be lower on Wednesday. All of this because the media beat us over the head with negative news. Fear was extreme.
The take away is, monitor the put call ratio.
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