When the Put/Call ratio on the S&P 500 climbs above 1.12, history suggests something interesting happens—traders typically see solidly positive returns rolling in over the next three months. This metric, which tracks the ratio of put options to call options, acts as a sentiment gauge for institutional positioning. A ratio above 1.12 often signals excessive pessimism in the market, which tends to reverse when fear subsides.

Looking ahead to 2026, many analysts are building their thesis around similar macro indicators. If these technical patterns hold, it could set up a favorable backdrop for risk assets across the board. The window for accumulation during periods of high put/call ratios has historically rewarded patient capital.