An argument could be made that sentiment allows more upside and...

An argument could be made that sentiment allows more upside and I agree.

But to think that lower levels of put/call is likely, discounts the fact that the 2009/10 rally wasn't huge. It was massive in any historical terms and so further highs are more likely to give divergences in any measure rather than new extremes.

So here are the averages on US put/call.

First is a 5 day average. That looks a lot like when XJO had a high in mid April BUT US made a high April 26.



Second is a 10 day average. Similar story.



Third is 20 day average. Still falling and you could say we are just at the start of April. I still make the point that new lows in the indicator is unlikely. Extremes are made early in the move and divergences there after.

So we may see many divergences and they could continue for months or even years, BUT I would be surprised by new lows, so a correction of some substance must be very close.