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The Rydex Market Timers
Two consecutive down days in the equity markets must seem like Armageddon for those whom forgot the markets can go both ways. But let's be real. Nothing has happened. A 3% down draft in two days after a 30% moonshot in the SP500 over the past 6 months is nothing, and at best, this week's events serve to remind investors that markets MAY go in both up and down directions. Risks have been rising for awhile, and it is just not because the bullish (sic: foolish) extremes in sentiment. Rising and persistent trends in the CRB Index, gold, and yields on the 10 year Treasury are significant headwinds. Crude oil had a high probability of trading higher. Something had to give, and investor sentiment is just one part of the market puzzle.
Presented below is data from the Rydex family of mutual funds. Rydex is useful as sentiment data because it assesses how investors are positioned (short v. long) and if they have conviction in those positions (leveraged v. non leveraged). In addition, this is not opinion based sentiment data, but it is based upon real dollars and cents flowing into real funds. Lastly, there is over 10 years of data covering 2 bull and 2 bear markets.
The attached daily report (Premium Content) is from 2.21.11, and is courtesy of TheTechnicalTake.com
rydex report for 2.21.11
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"gimme a v"... "V!".
"gimme a bottom"... "Bottom!"
"what does it spell?".... "Buy the F'king Dip!"
Greed, fear, exuberance, we are in limbo. Unless we have silver legs and golden bottoms which contain big pouches of black tarry stuff worth a pot of gems...all dangling at the end of the rainbow. We're running, we're running to where the rainbow hits the horizon.
There are few investors in this market - mostly just gamblers. What's the difference? Investors have a brain. That makes stupid Bernanke & stupid Geithner gamblers. So what else is new?
What markets? I thought we were playing a game. Personally I'd like to see oil explode to the upside and gasoline head to $10.
What better way to ensure POTUS 45 in 2012? I don't use that much gasoline. And I grow food. Good luck out there.
You won't have to wait for $10 gas, when the national average price hits $4.25 - $4.50 it's game over, end of story, no recovery (like there ever was one). Then CNBS will start talking about how rising fuel prices cause the price of eveything to go up. So predictable...
Don't worry - central banks have a lot of experience in managing these things.
***** "c. Would I through caution to the wind and go long expecting the kind of gains we have seen the last six months? No" *****
What do we have here? a non-QE3 believer? How dare you Sir error on the side of Caution! The Ber-Nake would be so upset if he knew!!!
Someone phone the SEC we have a rogue on our hands!
Quoting JW n FL... "Someone phone the SEC we have a rogue on our hands!"
Should that not be "stuge" The Duke of Bedford would think so! ;-) But then he's a bit of a SQUARE!
What's missing in your analysis is the fact we are in a completely manipulated equity market(s). They bear no relationship to past analysis or methods in determining sentiment or direction. Two points are: 1) the short sellers have basically left the building, thus, there's a reduction in "buying power." 2) HFT algorithmic trading follows the lead of the manipulators; if longs liquidate, their effect is reduced or diminished. You can see this effect daily on an intraday chart of any index after the selling (long liquidation) dries up.
You are fighting a war with the last war's equipment. You're going to get overrun & will have to sue for peace. Bon Chance!
It looks like another set of (useless) indicators that can remain in overbought/oversold (or overbullish/overbearish) territory for weeks/months on end when the market is in trending mode, as it has been for the best part of 2 years.
Of no use whatsoever to anyone trading as the amount of 'excessive' bullishness/bearishness in some of those charts would have had you short for a lot longer than you could have remained solvent.
Lionhead's point is spot on: you cannot fight and trade daily with the markets in their current states using 'so-last-year-darling' technical analysis; you might as well fly to NY and give your trading account's money to TheBernank
I'm calling "Bullshit" on this manipulated markets conspiracy theory. The March 2009 retracement to date has been a typical Fibonachi 0.68% Bear market correction. End of.
Meanwhile the trading computers are just that, robot IQ software, in short toilet flush mechanisms. When the market trends upwards they buy, when it trends down they sell and then they BTFD. So no different to what most of us try to do and in truth they assist market liquidity both sides of the curve (so no threat if you've got your sums right).
As for Fed counterfeit funny money showing up there's no f'n volume to speak of. Where is it? Remember part of the Feds insidious brief is to "manage perceptions". So they say they're looking at the Russell 2000 (just words, pure bluff) and everyone thinks they're having their bidders buy up the market. But let me repeat, there's no f'n volume which would at least demonstrate the conspirators had evidence. In fact totally the reverse, the volume is all showing on the short selling side. Fact.
We are now due our normal (un-manipulated) Index correction and that's what we're getting this past 2 days. Conspiracy Theorists you only have your own delusions to blame despite all the evidence pointing the other way. Wake Up
Take away POMO and show us there is no market manipulation. Having "zero" in your moniker just keeps getting more and more appropriate.
Retail money (the punters like you and I) have effectively left the Indexes, they no longer trust them post 2007 crash and the double-whammy post-flash crash (their absence is rreason for the low volumes I believe). Meanwhile Hedgies and their like are pretty well fully invested judging by the lack of cash on the sidelines. That's where the money has come from to keep the Indexes going higher.
So if the conspiracy theorists aren't talking out of their arses they need some evidence of Fed funny money, especially given all evidence demonstrates the real money volume is showing up in the sell side, not the pump-priming side. So my question for you paranoids is simple:
Where's the f'n evidence? Show me the Fed money? I want to see the Feds money, smell the Feds money, feel the Feds money??? Lots of dirty luka. Rolling in Fed counterfeit money with some evidence Benny has been sweating working on the pumps. Fed backing up trucks of cash to the Indexes doors and shovelling it in with forklift trucks to pump up the Nas and NYSE. Give me money, money, money... where the fuk is it???
+1
A down day? What is that?
I heard from some old timers that it sometimes happens before it goes up again.
The day you run out of Viagra and It's your wife's birthday and wants some.
I dont know what you are smoking but for you to even think "Down Day" and then say it out loud! must be some Great! Stuff Man!!!! so puff, puff... pass!