Monday 14 April 2008

Put Call Ratio Oscillator Yet To Turn

Very quiet trading day today. The Emini closed down 4.50 points at 1,331.00 on relatively light volume of 1.5 million contracts. In fact this was a high churn day - with very small range of only 10 points compared to the volume traded.

We could be seeing some early buying but my swing trading oscillators are yet to turn up. Remember these oscillators are non-correlated - all based on different measures of market strength (market breadth, option volume and professional buying).

Emini Oscillators Image

Swing Trading Oscillators (Emini daily)

All 3 oscillators are over-sold. The TRIN is at -72, the Put Call Ratio at -75 and the Smart Money is at -322! The Hilbert Sine Wave on a daily chart is also a day or two away from making a cyclical low turn.

I'm still holding my short position from 1,379 based on a Better TRIN system and waiting for the Better TRIN Oscillator to turn up.

Emini-Watch Contest

A HUGE thank you to EVERYONE that entered the contest. I am lucky to have some great subscribers, with great ideas and valuable insights into trading.

There were 37 contest entries - and the winner is Evan W. who will be receiving the Roy Kelly book shortly. A special thanks to David B. for a great runners up entry too.

I'll be working on the new product over the next few months. I don't want to give too much away but it involves building a more complete trading methodology that will be delivered through a combination of eBook, online video and daily trade reviews.

Thank you again and good luck with your Emini trading.

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Tuesday 8 April 2008

Put Call Ratio and Other Observations

Put call ratio and other observations today. The Emini closed down 1.25 points at 1,371.00. Volume was very light at 1.4 million contracts and the range was only 10 points. We haven't seen a daily range of 10 points since early December 2007.

There were some positive developments today that support a long position:

  • Testing recent lows resulting in low volume and low range suggests "No Supply"
  • The previous support level of 1,362 held
  • Emini closed above the Hilbert sine wave resistance level, as shown last Thursday
  • Cyclical low turning points approaching in the 81 and 135 minute time frames

However, there are also some signs of weakness:

  • Better TRIN indicator was -55 today, showing underlying selling
  • Better TRIN Oscillator has now turned down
  • Put Call Ratio Oscillator has also turned down, see chart below

Emini Put Call Ratio Image

Put Call Ratio Oscillator (Emini daily)

I'm also looking at the US Dollar versus Japanese Yen for signs of the direction of the next move. As you can see in the chart below, we're at a possible cyclical turning point and previous resistance level. If the US Dollar starts to fall this shows funds are flowing out of the US markets and a down move is most likely.

Daily Yen Image

US Dollar versus Japanese Yen (daily)

I'm currently short from 1,379 based on my Better TRIN swing trading system and was hoping for a larger fall today. Since this is a system trade I will not override the signal and try and second guess the market. Good luck with your Emini trading.

Emini-Watch Contest

The contest will be kept open until after next weekend. Click on the button below to enter or follow this contest link.

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Filed Under Put Call Ratio

Tuesday 4 March 2008

Put Call Ratio and Other Oscillators

Put Call Ratio and other oscillators update today. The Emini closed down 4.75 points at 1327.25. However, this understates the strength of the late day rally. Volume was also the largest in the last 17 days at 2.8 million contracts traded.

Looks like the professionals are accumulating but I don't think we're going to rally straight away. I'm still waiting for an "end of trend" move in the 27 and 45 minute time frames (ie. final push down). With that in mind the chart below might be interesting.

Emini Put Call Ratio Image

Put Call Ratio etc. (Emini daily)

The Put Call Ratio and other oscillators are all approaching over-sold levels. However, they are yet to turn up. The Put Call Ratio oscillator is labeled "Better PCR Osc" in the chart above. The other oscillators are the TRIN, Smart Money Index and Hilbert Sine Wave.

You can read more about the Put Call Ratio here. Good luck with your Emini trading.

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Monday 4 February 2008

Put Call Ratio Oscillator Turns Down

The Put Call Ratio and TRIN Oscillators turned down today. The chart below shows the Better Put Call Ratio Oscillator has been overextended for a while, but finally turned. Similarly, the Better TRIN Oscillator has turned after a false "wiggle" 6 days ago.

Emini and Put Call Ratio Oscillator Image

Put Call Ratio Oscillator Turns

However, this latest signal is unconvincing - at the moment. The problem is that today's down close was on low volume - 1.2 million Emini contracts. The major indices (Dow, NASDAQ and S&P500) were also down on low volume. This is more like a "test" down day to see if supply is present. Let's see if we get any follow through tomorrow.

Click here to read other articles about the Put Call Ratio Oscillator.

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Monday 7 January 2008

Put Call Ratio and Emini Oscillator Update

Emini oscillator update today. The Emini closed down 1.50 points at 1,421.50 on large volume, 2.3 million contracts. We got a Stopping Volume pattern with higher volume but lower range than yesterday, showing professional buyers are coming in.

Emini Oscillator Image

Emini Oscillators

The chart above shows 3 of my favorite Emini oscillators. They are all non-correlated and only one is based on price. The oscillators measure:

  • Trading Index TRIN (Better TRIN Oscillator)
  • Put Call Ratio (Better PCR Oscillator), and
  • Professional end-of-day activity (Better Smart Money)

As you can see, all 3 Emini oscillators are over-sold, with readings of -193, -181 and -98. However, none of the oscillators have turned up yet.

A break above today's high of 1,431,50 would signal the end of this downswing and a turn in the Emini oscillators. Good luck with your trading.

Filed Under Put Call Ratio

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