This Isn't Business as Usual

As Doug Kass has emphasized to us dozens of times in recent months, this is not business as usual and things will not automatically revert back to normal once things get worked out. Keep this in mind because I imagine this scene is occurring throughout not just the U.S. but the world right now. How many folks think once this volatility is done we'll be back to the same old market?

But we will not be back to the same old market. The damage that has been done is extensive. It has left folks with nowhere to run and nowhere to hide. It will take time, and a lot of it, before we see bases built; bases big enough to overcome the tops that are present in the market.

On a shorter-term basis, let's talk about the equity put/call ratio. It finally got over 100% Wednesday. The last several times it got over 100% we had at least a one day wonder rally in the market. The dates are as follows:

1. On Nov. 6, the ratio was over 100%. Nov. 7 the S&P 500 was up.

2. Oct, 9 and Oct. 10, the ratio was over 100%. We zoomed upward on Oct. 13.

3. The ratio was over 100% on Sept. 15. On Sept. 16 we rallied.

4. Prior to that we have to go all the way back to March 14 and March 17 (a Friday and Monday) to see the ratio over 100%. March 17 was the March low.

5. On Jan. 15 we had the ratio over 100%. I would not consider this one a great signal since it took another week before we got a rally.

6. On Aug. 16, 2007, we had a ratio over 100% and that was a low in the market for nearly two months.

I can't say if this will be a one-day wonder rally or not but at this point how can we expect much more than that? Despite being wrong this week by thinking we would be oversold by Wednesday I see this equity put/call ratio and I see its history and I figure it has a good record of giving us a rally. So I'll continue to expect one.

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For more explanation of these indicators, check out The Chartist's primer.

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Know What You Own: Meisler mentioned real estate investment trusts. Some REIT stocks are General Growth Properties (GGP - commentary - Cramer's Take), Simon Property (SPG - commentary - Cramer's Take), Liberty Property Trust (LRY - commentary - Cramer's Take), Equity Residential (EQR - commentary - Cramer's Take), AMB Property (AMB - commentary - Cramer's Take), Highwoods Properties (HIW - commentary - Cramer's Take), and Duke Realty (DRE - commentary - Cramer's Take).

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At the time of publication, Meisler had no positions in any stocks mentioned, although holdings can change at any time.

Helene Meisler writes a daily technical analysis column and TheStreet.com Top Stocks. For more information, click here. Meisler trained at several Wall Street firms, including Goldman Sachs and SG Cowen, and has worked with the equity trading department at Cargill. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback; click here to send her an email.