S&P 500 Put/Call Ratio

The Trade Tariffs overnight have all the attention and the retaliation from China is still awaited to assess the full impact. AFter so many false starts on so many Policies it is a surprise that this one made it out of the white house. Will it remain or get quickly resolved? Not clear. What is being misunderstood is that Tariffs lead to higher prices. Still the immediate impact has been falling commodity prices. That would be correct if demand was an issue. So the S&P after falling a lot bounced back taking back the losses on a day of Options expiration. Maybe that is why the market bounced.

But here is a chart of a Options Premium average I found on the Web. Last night EWI also published a chart of the CBOE PCR that shows the ratio at the same level as Jan 26 when the bit top formed. Traders are as bullish now or as per the chart of Premiums below even more than they were in Jan. This is typical wave 2/B behavior, a lower top forms on more extreme sentiment.