User: Closing Basis - go with the flow: Equity Put Call Ratio: CPCE lower boundary rebounds - 2005 through 2009.jpg

CPCE lower boundary rebounds - 2005 through 2009.jpg

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Closing Basis - go with the flowClosing Basis - go with the flow
I went back and drew up another five years of lower boundary rebounds on the Equity Put Call Ratio for a total of 10 years and the results are (for 2005 through Feb 2014 following the rebound): 
 
23 total rebounds 
18 times SPX traded lower during the rebound 
4 times SPX traded flat, then made another leg up which created a top that lasted at least 6 months 
1 time only did SPX trade flat and then decline 
 
This would seem to suggest that we should expect one more leg higher before a meaningful top could be in. The law of small numbers applies here though, so this is food for thought, but hard to draw any strong conclusions from at this time. 7/20/14
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