Today, I want to point out an amazing new trend we're seeing in our OEX Put/Call Ratio studies. Take a look at the chart below.
The big money recognized in 2004 that the best strategy was to hedge their bets as their put/call ratio started increasing (from increased fear). Then, in 2009's low point, they moved to a very bullish stance. However, that changed in 2010 as they started hedging with higher put volume, and that's continued pretty much since then, except for this amazing new trend of increased large-cap optimism. This is where all the action is - in the large-cap arena with highly liquid options and stock trading.
That does not mean every day will be a beautiful day in Stock Market Land. That is where our Asset Allocation Model process comes in. There will be times when the Fed has to put on the brakes (we except that will not be this year, however), and there will be times when the optimism gets a little distorted on the upside.
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