LIVE MARKETS S&P 500: Enough already?

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  • U.S. equity index futures point to opening gains
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  • U.S. 10-Year Treasury yield dips to ~1.83%

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S&P 500: ENOUGH ALREADY? (0900 EST/1400 GMT)

In the 11 trading days from its January-3 record close, the S&P 500 index (.SPX) has declined 5.5%. read more

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Meanwhile, the 5-day moving average of the CBOE equity put/call (P/C) ratio, which can be viewed as a contrarian measure of sentiment, rose to 59% on Wednesday, or its highest level since a 59.2% reading on May 14 of last year. That high was just after the SPX completed a 4% slide, although in that case, over just three trading days:


So far, in premarket trade on Thursday, equity index futures are higher , and the P/C measure is ticking down to 58%.

Of note, since bottoming at 40.2% in June 2020, the P/C measure has ranged between high-30% and low-60% readings. If this pattern is to continue, then the measure could now be signaling that market sentiment may have become sufficiently bearish. If so, the SPX may have found, or could be very close to, a low of some form.

However, also of note, for around 20 years, from 2000 to 2020, the measure's range was mostly in the 50% to 90% area. It has only been post the COVID-crash, that the P/C measure's range has shifted down to similar levels that led up to the tech-bubble peak in 2000.

Therefore, traders will be watching to see if the P/C measure is to oscillate back down toward, or below, 40%. read more

A breakout much above the low-60% area, however, may signal panic. The measure peaked at 105% on March 17, 2020, in what would prove to be a more than 30% S&P 500 collapse.

(Terence Gabriel)



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Terence Gabriel is a Reuters market analyst. The views expressed are his own

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