Gee, who would have thought?

Here’s the trusty 5-day trailing average equity put:call ratio as of Thursday’s close (for some reason, indexindicators doesn’t update this until the next morning). CPCE doesn’t give sell signals like last week very often, but when it does, SELL!  BTW, Friday’s closing CPCE print was 1.05, so this thing has really rocketed up now.

Source: indexindicators.com

This translates into some serious price changes, even on long-term options. The SPY 90-strike December 2011 puts I favor are up 40% in just a few days. I’ve also written a whole bunch of March-Sept 2010 calls on stuff like QQQQ and DIA. That’s a great way to make some income, since even if the market doesn’t crash, so long as it doesn’t keep blasting upwards the time decay is money in your pocket.

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UPDATE. Here’s the chart as of Friday’s close. I bet we don’t bounce hard until the 5-day average gets at least 1SD above the mean. And look at the swiftness of this week’s drop in SPX… this is a more powerful decline than any since last winter.