Might do that wsam.
This "study" of mine is based upon the recommendation of
John Carter regarding the pc ratio. His rule is to not get short when the pc ratio is over 1.0 and not get long when it is under .6.
Although I found over 100 days in the last two years where the pc ratio spent significant time over 1.0 during the trading day.
I found only 6 days in the last two years when it spent significant time under .6. So there are simply not enough samplings to draw any conclusions about this level and it's effect on market behavior.
My general view is that given a market that is turning up from a decline, the higher the pc ratio, and the VIX for that matter, the more likely the reversal is to take hold. And given a market that is turning down from an advance, the lower the pc ratio and the VIX, the more likely it is to take hold.
As for Carter's recomended levels, they are a bit arbitrary.
I do agree with this however, when the pc ratio (or VIX) is moving in the same direction as the market, i.e. folks are buying puts when the market is going up or calls when the market is going down, that is a great confirmation that the trend is likely to continue.