I recently went over how I approach put/call ratio analysis. Now I’d like to do some actual put/call analysis.

Take a look at the basic CBOE Equity Put/Call Ratio chart below:

As you can see, it’s pretty noisy. We hit a six-month low of .43 on March 9, but that didn’t exactly top the market, or relate that much to the put/call the next day, for that matter.

But, as I noted, I prefer to smooth out the ration by using simple moving averages, if for no other reason than this reading is susceptible to a few big trades throwing it for a loop. Not to mention that the standard measure as charted above doesn’t weight the significance of each day. In other words, if volume was twice as heavy today compared with yesterday, we need to account for that, and the simple put/call ratio does not. The more data we have at our disposal, the better.

What if we augment the current put/call ratio? I’m going to add the total put volume from the previous five sessions and divided it by the total call volume. The CBOE database goes back to October 2003, so we’ll calculate this number for every day back to there.

Well, the five-day simple moving average (SMA) of the CBOE Equity Put/Call Ratio drifted as low as .502 Friday, before “rallying” to .524. Those are numbers we last reached in early part January, and in a vacuum, is a sign of excess complacency.

In fact, that January reading also coincided with a CBOE Volatility Index (VIX) near 17.5, which is not far above where it sits now. But a pretty steep and sudden sell-off ensued.

That’s the bad news.

The good news is that a five-day SMA of near .5 is not all that common. In fact, the last time it hovered near here was in July 2005. The VIX was much lower then, around 11. And that was not a time to get worried about the market as it was amid a pretty strong month for the S&P 500 (SPX).

The ISE Sentiment Index (ISEE) tells a similar story. The ISEE measures investor sentiment by dividing long call purchased on the International Stock Exchange (ISE) by long puts purchased and multiplying it by 100.

The ISEE closed at 253 on March 9. Remember, it’s a call/put x 100, so if you convert that to CBOE put/call terms that we’re more comfortable with , it would be .395. That’s the highest one-day reading there since October 2007.

A bigger question, though, is whether we should pay attention to these numbers at all right now.

Take a look at Citigroup (C) for a moment. Citi calls are all over the tape lately. In fact, the six most-active series Friday were calls in C, summing up to 925,208 contracts. That represents an incredibly large chunk of the 1,564,937 calls that changed hands overall that day.

C puts were active, too, but all told, nearly 70% of the options volume was in calls. And remember that both the U.S. dollar value of the options and the stock itself is very low.

I’m loathe to subjectively pick and choose when I should pay attention to a statistic like the put/call ratio, but I suggest taking it with a grain of salt right now. It’s pretty unusual to see one name dominate the volume to this extent like we did with Citi.

I think it’s safe to say that the put/call ratio sings a pretty complacent tune right now, as does the VIX. Whether that’s cosmically significant remains to be seen, as we can’t completely ignore that we’re overweighting the influence of Citi here.