FAQs Frequently Asked Questions

Q: Interested to know your thoughts on the Put / Call ratio on SPX - the huge spike means massive downside anticipation is present in the markets. But as I understand it, that's not the environment for a stock market crash as you are expecting?

A: The crowd is usually wrong at extremes. When the ratio spikes, many are bearish, so this sets up a potential short squeeze or buying pressure once those bearish bets are exhausted and unwound. Keep in mind that oversold can become even more oversold so a spike in rare cases can continue even higher which is more likely to occur during market crashes.