THIS IS EXTREMELY HARMFUL!!

Look at the chart below. It shows the S&P 500 index compared to the call/put ratio.

Am I the only one seeing this pattern? January 2024, P/C Ratio: 1.2 → S&P PLUMMETS April 2024, P/C Ratio: 1.2 → S&P PLUMMETS August 2024, P/C Ratio: 1.1 → S&P PLUMMETS April 2025, P/C Ratio: 1.1 → S&P PLUMMETS Not just once. It happens ALL THE TIME. And now, the call/put ratio is approaching a new high around 1.1, but the S&P is still sideways, which is why this situation is so dangerous. Because when this ratio spikes and prices don’t drop immediately, most people think the signal has failed. But that’s not the case. Pressure usually builds up first, then prices react. This is a direct relationship, simply put: When the put/call ratio spikes, it means traders are buying more puts than calls, and someone has to take the opposite side of those puts, usually brokers and market makers. So, brokers get stuck in short put positions, and when brokers sell short puts, they hedge risk by selling S&P stocks in the most liquid assets:

• Futures
• ETFs
• Stock baskets In fact, this explains a lot because the put/call ratio isn’t just “market sentiment,” it creates real risk-hedging flows that impact the index. So, the process is very simple: Buy more puts → brokers sell S&P to hedge risk → S&P loses support levels → S&P reverses. And now, this ratio has returned to the HIGHEST level since the Crash of Liberation, meaning risk-hedging pressure is increasing again even though prices still look “okay” on the surface. That’s how these moves usually start. Prices seem stable. Positions worsen. Then, support levels break, and the move happens QUICKLY. So, the setup is straightforward:
• If this ratio remains high, selling pressure will continue to impact the S&P.
• If the S&P drops, hedging will worsen and create a negative feedback loop. THIS IS NOT GOOD AT ALL. Because once this begins, the market stops trading on news and starts trading on flows, and forced flows tend to dominate in the short term.