Put/Call Ratio - Looking A Lot Like 1999

The 1-year moving average of the CBOE Total Put to Call Ratio just dropped below levels seen in early 2010 and is currently at the lowest level since March 2005. More importantly, as the chart below shows, we are now seeing a major divergence developing as stocks continue making all-time highs and the put/call ratio continues to fall. The last time we saw a formation such as this develope was in the late 1990's. Once caveat is the absolute level of the put/call ratio is much higher than it was during the late 1990's.