look at picture
what does this tell you
it tells you that retail investors think the market is going to go sharply down - professionals / big money does not use leveraged inverse ETFs, they just short or buy options
>When using the CBOE-based indicators, chartists must choose between equity, index or total option volume. In general, index options are associated with professional traders and equity options are associated with non-professional traders. Even though professionals use index options for hedging or directional bets, puts garner a significant portion of total volume for hedging purposes.
>In contrast, the CBOE Equity Put/Call Ratio ($CPCE) stays largely below 1, which indicates a clear bias toward call volume. Notice that the 200-day moving average is at .61, which is well below 1. Non-professional traders are more bullish-oriented
CPCE is showing that retail is shorting the market big time
whereas CPCI is showing that professionals are not - they are leaning more bullish than bearish
now.. you could argue that although retail investors are small, if they are not buying / they are shorting it will have disproportionate impact on prices
however, I think that in this case, the professionals are going to win out. I think that all retail is going to be squashed, both in their inverse leveraged ETF positions as well as their individual equity puts - in the short run I mean
the index puts/calls are not telling the story that we are going to sharply fall - gamma exposure is still positive too
for these reasons, I think that it makes more sense to look at this pullback for good deals or time to add to long positions
tomorrow is option expiration, good chance it's a flat day or within range due to the increased volume; but if it is red, likely that the option expiration 'hangover' continues into Monday opening session
I will probably be waiting until then to pick up cheapies; but if today turns around, or tomorrow is very green, then I will go long then instead