The 10-day moving average of the CBOE Equity Put/Call Ratio has climbed to levels we last saw in April—back when the S&P 500 was bottoming. What’s notable today is the context: in April, this level of put buying occurred with the S&P down nearly 20%. This time, the index sits less than 4% below all-time highs.
Today’s reading on the 10-day moving average narrowly misses the top quartile of historical fear levels. That’s meaningful because this ratio tends to move inversely with equities. Elevated put activity—investors hedging aggressively—has historically aligned with intermediate market bottoms and stronger forward equity returns.
This isn’t an extreme event, but it is a constructive one. Elevated fear, equity markets sitting on key support levels, and favorable seasonality heading into year-end create a backdrop that may help steady investors’ nerves.
Sometimes, markets don’t need euphoria to advance—just enough fear to reset expectations.
