OEX Put/Call Spike

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The "smart money" OEX put/call ratio has spiked over the last couple weeks. The OEX data had been about the only data that held out and supported further gains earlier this month. Now it has reversed and is looking to have a bearish hue. What is the meaning? Don't know for sure, but it seems they have a mind to hedge right now, and usually they do a pretty good job.

An interesting thing to notice about the data if you look closely is that often the highest spike in the data occurs shortly after a high, rather than before or right at it. So it seems that they wait for an initial break to indicate a possible trend change, then they really get the most bearish at the first rebound to a lower high after that break. That is basically what has just happened in our case too.

So my take is still that this is a failed breakout pattern on the S&P 500 and that prices are more likely to head lower over the coming few months. The USD/EURO is also confirming this idea at the time being. Also there have been several distribution days in a cluster the last 2 weeks after a high. For those that follow Investor's Business Daily at all, this basically indicates that institutions are starting to pick up their selling near a high, and that behavior often occurs near market highs.