Stock Market Timing Indicator

I was experimenting with this indicator which looks at the relative strength of the S&P 500 (^GSPC) versus the Put: Call Ratio.  As the market moves up, it must be confirmed by a decline in the put to call ratio, otherwise it’s a false signal.  I used a couple of simple moving averages to smooth out the volatility in the index.  I then put together the same chart of the S&P 500, to look at whether the signals got you in/out earlier or later.  Obviously, the longer term trend of this market is still down.  It looks as though the indicators might be trying to make a bottom here; We’ll have to wait for a confirmation though. I thought it was an interesting indicator worthy of more investigation.

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