Two Technical Indicators That Show the Stock Market Could Be in Store for More Pain

Two Technical Indicators That Show the Stock Market Could Be in Store for More Pain
Traders work on the floor of the New York Stock Exchange on Jan. 21, 2022. Courtney Crow/New York Stock Exchange via AP
|Updated:

The stock market is off to a shaky start in 2022, a sell-off that accelerated over the past trading week. The Nasdaq composite, which tracks some of the largest technology companies in the world, is down nearly 12 percent year-to-date.

Even more worrisome are daunting technical indicators that point to more pain coming. Helene Meisler, a popular voice on FinTwit, pointed out that the put-to-call ratio could close at its highest point since May 2020. This ratio shows how many put contracts are being placed versus call option contracts.

Why Put-To-Call Ratio Matters

In short, a put-to-call ratio shows that option traders are more bearish than bullish.