Last Wednesday thru Friday, NDX $wPut/Call Ratio hit 4.6, 5.9 & 40+ on huge $wVolume ($700M, $2.4B and $7.4B, respectively). That is a lot of put buying by the institutions (NDX options are NOT for mom & pop traders, even at normal vol levels (VXN stayed above 60 last week)). The last time we saw these $wPCR levels for NDX, it was during the 2001-2002 dotcom debacle.
For those of you who remember my calls on CNBC back then, the readings at these levels for NDX are very bullish 1 to 3 days forward. We should expect 100 pt move in NDX in 3 days (registered 41+ today) which means, most likely, the AAPL earnings report tomorrow after the close, will be viewed very favorably.
In addition, a major perma bear threw in the towel today, LIBOR had eased off overnight and US short-term interest rates went up. In the last hour, there was a lot of mutual fund buying today. This is all good for equities.
Bottom Line: The chance of revisiting the Oct lows is now highly diminished albeit not zero.