Bearish Options May Bode Well for S&P 500: Technical Analysis
This article is for subscribers only.
Bearish options outnumbered bullish bets by the widest margin since the Standard & Poor’s 500 Index made its bottom this year, a sign that U.S. stocks may be due for a rebound, according to Birinyi Associates Inc.
The ratio of puts to calls on U.S. indexes increased to 1.15 on May 17, the highest in two months. Since the S&P 500 began its rally from a 12-year low in March 2009, the options ratio had risen or stayed above that level on five occasions analyzed by Kevin Pleines, an analyst with Westport, Connecticut-based Birinyi, who found that four of those times the market was higher a month later.