Something weird happened in the options market on Wednesday…

The stock market opened higher that morning. The S&P 500 gained more than 20 points in the first few minutes of trading. And, it held on to those gains throughout the rest of the session.

Normally, that sort of bullish action inspires traders to buy call options – options that increase in value when stocks go up. But, that’s not what happened on Wednesday. Instead, traders were loading up on put options – BIG TIME.

That’s weird.

Look at this chart of the CBOE Put/Call ratio (CPC)…

The CPC is a short-term, contrary indicator. It compares the action in call options to the action in put options. A reading above 1.20 shows extreme bearishness among speculators and can indicate a good time to buy stocks for the short term. A reading below 0.80 shows extreme bullishness and could indicate a good time to sell.

The CPC closed at 1.28 on Wednesday – the highest level of 2019, as the S&P 500 screamed higher.

In other words, investors became more bearish as stocks rallied. From a contrarian perspective, this is a short-term bullish sign.

This is the fourth time the CPC closed above 1.20 over the past five weeks. The previous three occurrences led to quick bounces in the stock market within two days. If that pattern continues, then stocks should be higher a few days from now than where they are today.

Admittedly, it’s not easy to be buying stocks right now with all the erratic moves happening in the stock market. But, extreme readings in the Put/Call ratio have generated plenty of profitable short-term trading signals so far this year. Wednesday’s reading of 1.28 indicates the most extreme level of put buying (relative to call buying) we’ve seen in 2019.

And, with the broad stock market on the verge of another large move, it sure seems to me like stocks are more likely to be higher than lower in the days ahead.

Best regards and good trading,

Jeff Clark

Reader Mailbag

Today, plenty of comments on Jeff Brown’s guest essay ”The 5G Disinformation War”…

Thank you for directly addressing the fears of those who have been vulnerable to the nefarious disinformation. I applaud you on your clear communication with this matter, and frankly, all information. I am grateful I met you years ago and have benefitted from your research, ideas, and brilliant mind.

– Mark

I just read your email about 5G. As in all of life, it’s all about the money. Follow the money and get the truth. First, do you really trust our government as a source of information that is true and reliable? That’s the same government that allows Big Agra to fill our food with toxic (don’t forget neurotoxic) chemicals, the same government that allows Big Pharma to dispense toxic medicine that cures nothing, but only covers symptoms…

This (5G) will be way worse for the population than Monsanto. I can choose to eat organic, but not everybody else can. Big Tobacco and Monsanto lied for years and these are the same lies that are coming from the makers of the 5G technologies. We will not be able to run away from 5G towers and their emissions. Your readers quoted in the Sunday email are 100% correct…

– Irene

Obviously, SOMEONE is lying. My bet is that it is the “Deep State.” I am not a Luddite, but I will avoid the “new thing” until it is proven safe. (And I refuse to have a microwave or a CFL bulb in the house.)

– John

I accept that the present evidence may not be conclusive, but I think it would be premature to write off all concerns about 5G as a Russian conspiracy. Sure, the Russians might try to sabotage 5G, but would one RT broadcast really carry any significant influence? I would suggest about as much influence as a few Russian bot postings had on the U.S. elections.

Although you note that 5G phones will have FDA approval, this means nothing, as the FDA is a captive agency, literally bought and paid for by commercial interests. The FDA still maintains that Roundup is safe, but I doubt Bayer’s shareholders would agree with that at the present time…

So if you can make a quick buck from 5G investments in the short term, that’s fine. But I feel you should appreciate that there is some degree of risk, which has the potential to prove devastating for a long-term investment.

– Philip

Mike’s Note: Thank you all for writing in, and for being Market Minute readers. My colleague Jeff Brown says the question of whether 5G will have an impact on our health is one he gets a lot. And that’s why he’s prepared a report for readers addressing this concern. You can read it right here.

Jeff also talked about it last night, in detail, during his 5G summit. If you missed it, don’t worry. You can still catch a replay of the event. And just for attending, you’ll receive the No.1 5G company on Jeff’s watchlist, for free. Click here to watch the replay now.