Selling Pushes Short-Term Optimism Index Toward Pessimism
Based on preliminary figures, today's session will push the Short-Term Optimism Index down to 39, from 71 on Friday. The Risk Level is poised to decline to 4, from 6 on Friday.
Again, these are preliminary and could change depending on how stocks do into the close and what the final figures are.
Since the August panic low, stocks have had a habit of responding well when the Optimism Index declines below 40, though the bigger the extreme the better and this is just barely.
Biggest holdouts are Inverse ETF Volume, which has barely budged, and the Cumulative TICK, which isn't showing any big sell programs.
On the extreme side, put/call volume in equities is extremely skewed toward puts, with intraday CBOE data showing almost an equal number of puts vs calls traded, something that has preceded prior lows.
A mixed picture, but we'd prefer to see it get more extreme in this whip-saw market.