The Put/Call Ratio is provided by the Chicago Board Options Exchange (CBOE), and is a measure of optimism, or pessimism. A 'Put' is an Option purchased by a trader betting the market will drop. A 'Call' is an Option purchased by a trader betting the market will rise. Thus, a higher Put/Call ratio indicates that the level of pessimism by traders is high. A low Put/Call ratio means that most traders are expecting the market to (continue to) rise.

Sentiment indicators, like the Put/Call Ratio, are contrarian indicators. That is, high optimism is usually a sign of a market 'top', while high pessimism is usually a sign of a market 'bottom'. Both high optimism and high pessimism are unsustainable, and thus are great indicators in market timing.