The highest P/C # prior to Friday's was 1.24 on November 15th. On that day, $SPX closed down 2.16pts at 1353.33. This concluded a nearly 110pt drop from around 1461.
So...Friday we saw the P/C ratio push up to 1.26 and this means that a huge chunk of market participants have moved to one side of the ship. Since the market loves nothing better than to squeeze the shorts, then one has to be prepared for such an event when the markets open Tuesday. Who knows just how high a short squeeze might take the markets. Market dynamics do appear to have changed and this means that any potential short squeeze could fail to produce anything lasting to the upside. Even so, it is still possible that the markets revisit last week's intra-day highs before rolling over. This assumes, of course, that we have put in a de-facto top and we're just waiting around for a new numerical high that will then fail.
And it could all just be voodoo and we head to $SPX 1800 by the end of June.
That's the total PC ratio and looks to be mostly index hedging, so those guys may be willing to hang on and take the hit for the protection.
The equity P/C ratio only hit 0.73, so the speculators are not panicking. The index ratio was 1.74.
The recent ES action suggests it wants to try to re-test the highs. On Thursday the session low held above the overnight low. Friday's session low was 1 tick above Thursday's session low. The only negative is that Friday's regular session was an inside day for the ES versus Thursday's action ,i.e., we did not see a higher high along with the higher low. Friday's overnight high was above Thursday's regular session high but I put more emphasis on what happens during full trading. Hopefully, Tuesday will resolve this.