rydex report for 5.3.11

8/7/2019 Rydex Report for 5.3.11

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Figure 1. Rydex Bullish and Leveraged to Bearish and Leveraged/ daily

1) The ratio of Bullish and Leveraged to Bearish and Leveraged: 3.70

2) Values =2 (above red line) means more bulls than bears and typically, this isbearish for prices


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Figure 2. Rydex Money Market Fund/ daily

1) High indicator value suggests fear as investors are seeking the safety of themoney market fund; this is bullish for higher prices

2) Low indicator value suggests complacency as investors are fully invested; this isbearish for higher prices

3) The trading bands are set to identify values that are 2 standard deviations abovenormal over the past 40 trading days


3/11

Figure 2a. Rydex Buying Power/ daily

1) The Rydex Buying Power indicator assesses the amount of money on the sidelines;it is fuel available for buying

2) This indicator assesses considers both non committed money (i.e., assets in themoney market fund) and committed money (i.e., assets in all of the bearish fundsthat could potentially wind up in bullish funds) as available money on the sidelines

3) The indicator is calculated by taking the sum of all assets in bearish plus moneymarket funds divided by all assets in bullish plus bearish plus money market funds

4) Low indicator values suggest little money on the sidelines and are consistent with

excessive bullishness (i.e., bear signals)

5) High indicator values are consistent with increased buying power and areconsistent excessive bearishness (i.e., bull signals)


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Figure 3. Rydex Relative and Absolute Combination Indicator/ daily

1) When the indicator is green bullish for higher prices2) When the indicator is red bearish for higher prices3) The indicator uses the total amount of assets in all bullish funds and the total

amount of assets in all bearish funds; the indicator looks for both relative andabsolute extremes in the data


5/11

Figure 4. Rydex Combo Indicator/ daily

1) Figure 4 is a composite indicator constructed from figure 1, figure 2a, and figure 3.


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Figure 5a. $VIX/ daily

Figure 5b. $VXN/ daily


7/11

Figure 6. Rydex Total Bull v. Total Bear/ weekly

1) The indicator uses the total amount of assets in all bullish funds and the totalamount of assets in all bearish funds

2) The indicator attempts to identify multi week swings

3) When the indicator is green, Rydex investors are bearish and there are moreassets in bearish oriented funds than bullish oriented funds; in general, this isbullish for higher prices

4) When the indicator crosses above the signal line, prices tend to move higher

5) Indicator values >=58% lead to intermediate term tops


8/11

Figure 7. Rydex Buying Power/ weekly

1) The Rydex Buying Power indicator assesses the amount of money on the sidelines;it is fuel available for buying

2) This indicator assesses considers both non committed money (i.e., assets in themoney market fund) and committed money (i.e., assets in all of the bearish fundsthat could potentially wind up in bullish funds) as available money on the sidelines

3) The indicator is calculated by taking the sum of all assets in bearish plus moneymarket funds divided by all assets in bullish plus bearish plus money market funds

4) Low indicator values suggest little money on the sidelines and are consistent withexcessive bullishness (i.e., bear signals)

5) High indicator values are consistent with increased buying power and areconsistent excessive bearishness (i.e., bull signals)


9/11

My Comments

1) Ok, figure 1, which is the Rydex bullish and leveraged to bearish and leveraged ratio, is atit 3.70

2) This is the highest this value has been since the rally began in March, 2009

3) The last time the bulls were this confident was in 2001

4) In other words, these market timers are so confident in their market outlook that they areonly expecting one outcome

5) I ask this question: when have you known the market to ever be a sure thing?

6) I would be ok with all this bullishness if the market was coming off a bottom

7) But after 2 years or 100% plus move in the SP500, now people want to go all crazy bullish

8) I really dont see it

9) Once again, I have never, ever known a sure thing when it comes to the market


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rydex report for 5.3.11

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