Everywhere we look nowadays, there’s talk of bear markets and people throwing the “R” word around, making everyone super nervous to invest their money in the stock market.
But I’m a fact-based trader…
So when the put/call ratio was at the 1.30 level on Tuesday, which it hasn’t hit since the COVID-19 crash in 2020, you bet I paid attention. That’s because it doesn’t hit these levels often.
But when it does, we typically get a rally soon after…
I don’t think it’s any different this time, which is why I’m ready to show you how the put/call ratio is signaling a bullish market.
How the Put/Call Ratio Is Signaling a Bullish Market
The put/call ratio is probably one of the most useful indicators I know.
Whenever you look at the put/call ratio and it’s between the two pink lines on the chart below, that’s random. It spends most of its time in the middle of these channels, which means it’s useless.
But…
Whenever the put/call ratio goes out of these channels, it’s meaningful because it tracks the amount of put buyers to call buyers in the market. And when the ratio of put buyers increases in comparison to call buyers — meaning sentiment is bearish — we tend to see an upward influx.
This means the market is a little “put heavy,” which will make it want to turn around.
The level I saw on Tuesday was even higher than the one we had during the first wave of the pandemic when everyone was panic selling…
So this is a rather bullish indicator.
But also keep in mind that volatility is double-sided right now, and that doesn’t happen during bear markets. Instead, people lose interest in stocks and they go dead, for lack of a better word, in bearish cycles…
And I believe a bull market is on the way.
Check out my short video to learn more about how the put/call ratio is signaling a bullish market right now, and also why interest rate hikes aren’t always a bad thing.
Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video, and see what other trade opportunities we’re paying close attention to!
P.S. Trading legend Chuck Hughes is making his boldest prediction ever…
Even after starting back in the ’80s with just $4,600, which he turned into more than $460,000 in profits in two years*…
Even after creating eight figures in trading opportunities from live trades, and even after being crowned a 10-time “Trading Champion”…
Chuck has never seen an opportunity quite like this one.
*Disclaimer: Stated results are atypical for a given period. Past performance is not indicative of any future results. Trade at your own risk.
