• Are Treasuries The Last Diversifier Left?
    Leo Kolivakis
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    In the first quarter, the US economy grew by 3.7%, revised up from an originally reported 2.7% increase. But growth estimates all the way back to the start of 2007 were revised lower. Moreover, the level of real GDP in Q1 was revised down by $100 billion. Does this mean the secular bull market in bonds will continue? And are Treasuries the "last diversifier left"?
  • Japan: Land of the Rising Debt
    Vitaliy Katsenelson
    07/30/2010 - 13:51
    The Japanese economy operates on the assumption, soon to be proved false, that the government will always be able to borrow at low interest rates. As internal demand evaporates, the government will have to start hawking its debt outside Japan — in a more realistic world, where interest rates are a lot higher.
  • An Open Letter to President Obama
    Phoenix Capital Research
    07/30/2010 - 09:55
    Dear Mr. President, You don’t know me, but I was one of the millions of Americans who voted for you in the last election. I have since been fairly critical of your Presidency largely because I, like many others, feel betrayed by the policies you have enacted upon winning said election.

Rydex Market Timers: This Is Amazing!

thetechnicaltake's picture
Submitted by thetechnicaltake on 12/16/2009 14:07 -0500



Figure 1 is a daily chart of the S&P500 with the amount of assets in the Rydex bullish and leveraged funds versus the amount of assets in the leveraged and bearish funds. This data is hidden, but the ratio of bull to bear, which is depicted by the indicator in the lower panel, is 2 to 1. Since July, 2009, every time this ratio got above 2, it marked a short term top in the S&P500. These are noted by the maroon colored vertical bars.


Figure 1. S&P500/ Rydex Leveraged Bull v. Leveraged Bear/ daily
******
Figure 2 is a daily chart of the S&P500 with the amount of assets in the Rydex Money Market Fund in the lower panel. The current value is the lowest value since the rally began in March, 2009. While all of this is short term noise, it is absolutely amazing that there would be this much commitment to the market after a 60% plus run in the S&P500.

Figure 2. S&P500 v. Rydex Money Market/ daily


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by Daedal
on Wed, 12/16/2009 - 15:12
#166376

Replace 'absolutely amazing' with 'exceedingly demoralizing' and you've glimpsed at my sentiment.

by spekulatn
on Wed, 12/16/2009 - 18:46
#166737

That's some funny stuff, Daedal. 

by El Hosel
on Wed, 12/16/2009 - 19:25
#166784

Stocks are "parked" at the highs to "demonstrate" the "strength" of the "recovery" and of the  "resilience" of the markets.

"Hello, Crash"

by Cognitive Dissonance
on Wed, 12/16/2009 - 15:16
#166380

"While all of this is short term noise, it is absolutely amazing that there would be this much commitment to the market after a 60% plus run in the S&P500."

It appears the dogs have been conditioned to bark every time the Bernanke helicopter is overhead. I would say people are expecting the tap won't be turned off any time soon. I see this as a cynical index rather than dumb money or bravado. People recognize that desperate men (Bernanke and company) will do desperate things and they don't expect the desperation to end anytime soon.

IMHO they are expecting really bad times down the line from this Fed insanity, but the potential for shorter term profits is just too tempting to leave "on the table". Of course, even single person believes they will be smart enough to recognize the down turn when it begins and exit stage right. We shall see.

by thetechnicaltake
on Wed, 12/16/2009 - 16:28
#166496

very much agree with your comments

by Anonymous
on Wed, 12/16/2009 - 19:55
#166841

"...the potential for shorter term profits is just too tempting to leave "on the table"."

Bingo.

Let's be realistic. The fed's balance sheet has doubled with MBSs being the major component of the increase. Who in their right mind would think the FED would raise rates before it can sell them without major losses? Not me. Dollar down for a long long time me thinks...

by J.B. Books
on Wed, 12/16/2009 - 15:25
#166394

They're rolling profits into next year - taxes would then be due, 4/15/2011.

by Rusty_Shackleford
on Wed, 12/16/2009 - 16:13
#166482

Yeah, and I imagine by then we'll paying our taxes using pelts and a tally stick.

by Waterfallsparkles
on Wed, 12/16/2009 - 15:31
#166405

Only problem with rolling profits into next year is that the Capital Gains Tax could change.  It is an unknown.

by Cognitive Dissonance
on Wed, 12/16/2009 - 15:56
#166456

The $1 Billion spent by the financial industry buying CONgress over the past decade assures them of no such change. Or if there is (for Congressional PR purposes) a give back will miraculously appear somewhere else. The game is rigged. Always has been. It's just more rigged now, against us rather than for them.

by berated
on Wed, 12/16/2009 - 16:50
#166540

Noobie question: could the money be going somewhere else (eg, bonds or precious metals)?

by J.B. Books
on Wed, 12/16/2009 - 17:55
#166644

Well Yes, but that's the point,  Rydex is a market timer's fund or MTH (Market Timer Heaven) when the money market funds total assets drop this low that mean the money is somewhere else within the Rydex world of funds.  In other words, all the market timers are on one side of the trade and there No Mo Mony to invest.  Think herd.  Sometimes herds run in the right direction, remember March 09 and the stock market rally??  Or think Aug 2008.....

 

Books

 

 

by merehuman
on Wed, 12/16/2009 - 17:57
#166648

welcome , berated newby. Mine went to silver before it faded.The dollar is just not as green as it used to be, neither are we . Ha ha

Long on my garden, in a safe place.

by Anonymous
on Wed, 12/16/2009 - 17:45
#166631

I follow the Rydex and think its one of the best indicators but the one I see gives a complete different picture although your version makes sense - probably you can explain to me why the Schaeffer version is so different?
http://www.schaeffersresearch.com/streetools/market_tools/rydex_nu.aspx

by Anonymous
on Wed, 12/16/2009 - 19:40
#166819

Scahaeffers is making some sort of calculation and calling it adjusted NAV plus they are only including the URSA and NOVA funds, whch I think are the NAS bull and bear funds; I use actual assets and I also use all of the leveraged funds in the calculations

by Anonymous
on Wed, 12/16/2009 - 23:51
#167080

its the same....the inverse of .5 is 2.... think upside down...

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