Put / Call Ratio is the number of put options traded divided by the number of call options traded in a given period. Some investors use this ratio as an indicator of the market direction.
Posted on 11/19/2022 12:49:52 PM PST by Kaiser8408a
Alarm!
Yesterday’s PUT/CALL ratio was the highest in history at 1.46. That is higher than 2001 and 2008.
REAL M2 Money YoY has crashed to its lowest level since 1980 and Jimmy Carter.
And the train keeps on rollin’.
Instead of Little Games, The Federal Reserve is making this BIG GAMES.
Please don't post isolated facts.
Please exactly define what is meant by "PUT/CALL" ratio. Please also specify the absolute volume of puts and calls, respectively. For which index does this particular high ratio of puts to calls apply?
Regards,
Puts are options that make money when the underlying asset (stock or ETF) goes down in price. A call makes money when the price goes up.
If the Put number is higher than the call number, it is an indicator that more people think the market will go down.
M2 is the amount of “money” in the system. It’s gone up a lot in the last couple of years. With interest rates “sucking” money out of the market you would expect the rate of change, year over year, to do down. This means there is not as much liquidity in the marketplace.
This is hugh and series!!!
I know if the red chart was a seismograph, it’d be very bad. Stock Market stuff I know less about.
We’re all (not) gonna die.
This would seem to suggest that the market is oversold, short term.
Actually, we ARE all gonna die. Just not all at once on the same day.
If you’re suggesting a deflationary indicator that’s a horrible thing. Deflation was what we had in the great depression, money is worth a lot as prices tank so you end up earning very few dollars (i.e. salaries compress as prices compress) but debts stay the same. So if you owe $200K on a good low fixed rate mortgage and your salary tanks from $150K/year to $50K you can still afford the now much cheaper clothes and groceries still but have no hope of keeping up that unchanging mortgage payment every month. Or student loan payments. Or credit card payments. Borrowers get destroyed by deflation, and so do lenders who simply cannot get paid. And not irresponsible borrowers, mind you, but people who bought a home at a then reasonable cost to raise their family in. They end up losing it if the currency deflates.
I am not suggesting anything. I was trying to give a basic description of what was going on.
I have no idea what’s going to happen next year. But no one seems to be looking forward to it.
The Fed is tightening due to "price" inflation (caused by supply shock).
The real problem is "monetary" deflation, and the Fed's actions are making it that much worse.
We're in for some interesting times...
“While The Fed needed to reduce stimulus, we are now facing a stock market crash with the crash in REAL M2 Money. “
It will take a depression to end this inflation.
And it must end.
“The real problem is “monetary” deflation, and the Fed’s actions are making it that much worse. “
Very high rates for savers ends monetary deflation. And there very little risk of it anyway.
While price inflation is a critical, existential threat.
Just another financial gibberish story. Probably wants everyone to move their money into timeshares.
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FTT tokens
And not irresponsible borrowers, mind you, but people who bought a home at a then reasonable cost to raise their family in. They end up losing it if the currency deflates.
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Wouldn’t a fixed loan interest rate payment stay the same?
The pressures on the markets today are interest rates. Inflation must come down so interest rates are raised to slow down spending. A rule of thumb is Rates must be higher than inflation to stop it. At 8% inflation, look for interest rates to go up to at least 9% in order to stop inflation. That rate will most assuredly cause a recession. Try to imagine the Gubmint trying to pay bonds off at 8-9% on $32 trillion dollars. We will soon be paying $trillions in interest on the debt.
Al this most likely won't happen in months, but years. We will at least suffer for the next 2 years anyway even if the new congress does the right thing.
I would look at covered calls for my stocks and look to interest bearing accounts for cash. In another year or so your bank could be paying 6-7% on savings vs. 2%-3% today. Back in the Carter years I got paid 13% on savings and 15% on CD's. I only hope we don't go back there.
Yes. Imagine that prices rapidly drop and the value of money rapidly increases (deflation). The opposite of inflation.
In reaction employers simply cannot afford to pay employees the same amount. The cut pay. And people are okay because prices have already dropped like a rock.
But now those with a mortgage are making half their salary but the payment stays the same. Uh oh.
We'll have to agree to disagree.
Every foreign nation is having enormous problems getting their hands on Eurodollars (what our money is know as when used by other countries).
Your position doesn't even begin to explain the enormous drop in price of commodities. That's a monetary deflation phenomenon.
Inflation can only be truly driving from the monetary side. Looking at it from pricing only does not support any reliable economic model.
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