CAUTION: The public is now betting big on a massive stock market decline.
The following commentary is from Jason Goepfert at SentimenTrader: Small traders were apparently unnerved by last week’s decline. They bought more protective put options last week than they did in any week since November 2008 as a percentage of their total volume. Even during the 2008 bear market, this kind of apprehension led to medium-term rallies (see stunning chart below).
A good way to check on the anxiety level of retail “Mom & Pop” investors is observing how they trade options. When they decide to expose themselves to a leveraged, wasting asset, emotions tend to take over.
Last week, across all U.S. options exchanges, small traders bought to open more than 1.9 million put options. That was more than 25% of their total option volume, the highest since November 2008 (see chart above). This is a big change from a few months ago, then they spent only 17% of their volume to buy protective puts, among the lowest of the bull market.
King World News note: The bottom line is that the public was not buying put options when they needed them most — prior to the recent stock market carnage. Now the public is buying a tremendous amount of puts at a time when the markets are most likely set to continue rallying. Bears need to be careful here in the short-term.
These charts are just a portion of one of the latest fantastic reports. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
***ALSO RELEASED: ALERT: Is This About To Ignite A Terrifying Global Storm? CLICK HERE.
***The extraordinary KWN audio interview with Gerald Celente has now been released and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***Felix Zulauf’s remarkable audio interview, where he discusses the gold market and tells listeners exactly how they can avoid wealth confiscation as well as how the global collapse will unfold, and much more, was released last week and you can access it by CLICKING HERE OR ON THE IMAGE BELOW.
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