META - An Important Magnificent 7 Indicator Finally Suggests Caution
2024-06-26 00:53:07 ET
Summary
- The Magnificent 7 currently accounts for 18% of stock trading and over 50% of all option purchases. We can't see the broader market going higher, or correcting, without their participation.
- The 'puts to calls' ratio of the combined seven stocks is at a historically low .33. Low ratios, signaling investor complacency, have occurred at past market peaks.
- Absolute 'put' buying in the Magnificent 7 is at an all-time low of $1.4 million a day. This means few traders are expecting lower prices, which is another worrisome sign.
- The last 25% to 50% of a stock’s move, either up or down, is usually driven by emotions, not economics. This one appears to be too.
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An Important Magnificent 7 Indicator Finally Suggests Caution