Tuesday, June 14, 2011

Market comments for June 15th: Astonishing!

The Put to Call ratio today closed once again above the 1.00 level this time reaching 10 consecutive days the ratio has reached this occurrence. The last time the Put to Call ratio had a run like this was starting on June 26th, 2008 where for 13 consecutive days a 1.00 Put to Call ratio was observed. In the chart below, I have circled both occurrences with red circles and arrows pointing to both periods.

In the chart below, the Dow Industrials average is plotted so that you can see what turbulence followed just after the June 26th, 2008 period. It started the big selloff in the market.

The real question to ponder right now is whether we are at the precipice of the decline, as we were at roughly this time in 2008 as you can see from the chart. That was the beginning of the drop all the way down to Dow 6,500. Back in June 26th 2008, the Dow was at 11,500, which wasn't too far from where we are starting now, is it? :) Only time will tell and it will be hindsight as that. Coincidence or correlated? Cause or Effect? That is the real question. Astonishing!

UPDATE: 5:45am PST

The Core CPI for May came in at +0.3% or an annual rate of +3.6. Also, the Empire State Index dropped from + 11.88 in May to -7.79 in June and that isn't good! Dow Futures are down about 110 points and the Nasdaq Futures are down about -20 points. Adding to the drop in the Futures is the riots in Greece over the austerity required to get bailed out by the EU. The people don't want any part of it and have turned unfortunately to violence in the streets as tear gas and water cannons are now targeting those protesters.

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