While rollovers paint a pretty bullish picture, there are quite a few indicators that suggest it’s about time the bears reinforced their presence. Though the volatility index (VIX) is commonly known as the fear index and is considered to be one the best indicators of fear and recklessness, it can often be misleading for a trader. While an extremely low VIX may push a trader into going short with the expectation that recklessness will give way to panic (because of a meltdown in prices), if the former exists along with a bearish mood in the market (or an adequately hedged market), the expected panic may not materialize. This was exactly the case right through this series, as traders were quite often fooled into going short in the market looking at the low VIX levels. The expected meltdown never materialized, as the market was almost always adequately hedged. So, as a derivatives trader, one should ideally see it in conjunction with another indicator that reflects the bullishness/bearishness in the market. An ideal indicator for such a thing can be the put-call ratio (PCR). If we divide the daily VIX with the daily near month put-call ratio, the resulting ratio probably takes care of this inefficiency of the VIX. More importantly, it’s probably a better tool for someone trying to make a trading decision. This is called as SMR.