rydex report for 3.19.10

8/14/2019 Rydex Report for 3.19.10

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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: 2.56

2) Values =2 (above red line) means more bulls than bears and typically, this is bearish forprices


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Figure 2. Rydex Money Market Fund/ daily

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

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

3) The trading bands are set to identify values that are 2 standard deviations above normal

over the past 40 trading days


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Figure 3. Rydex Relative and Absolute Combination Indicator/ daily

1) When the indicator is green bullish for higher prices

2) When the indicator is red bearish for higher prices

3) The indicator uses the total amount of assets in all bullish funds and the total amount ofassets in all bearish funds; the indicator looks for both relative and absolute extremes inthe data


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Figure 4. Rydex Combo Indicator/ daily

1) Figure 4 is a composite indicator constructed from figures 1 -3.


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Figure 5. $VIX/ daily


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

1) The indicator uses the total amount of assets in all bullish funds and the total amount ofassets 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 more assets inbearish oriented funds than bullish oriented funds; in general, this is bullish for higherprices

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

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


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Figure 7. Rydex Buying Power/ weekly

1) This indicator is constructed from all the assets in the Rydex Money Market Fund andfrom the total amount of assets in all bullish funds plus the total amount of assets in thebearish. Essentially, this is a combination of our two buying power indicators: my oldversion and the TradeKing version.

2) The purpose of the indicator is to assess the amount of money or buying power on the

sidelines

3) High buying power bullish signal

4) Low buying power bearish signal


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My Comments

1) What a difference a day makes. When I first saw tonites indicators, I said, Wow!

2) The Rydex market timers are now overwhelmingly bullish.

3) Figure 1: the leveraged bull to leveraged bear ratio is 2.56; this is the 4th

highest valuesince the rally began in March, 2009

4) Figure 2: money market funds have become extremely low

5) Figure 4: with 2 out of 3 of our indicators overly bullish (i.e, bear signal), the compositeindicator is decidedly bearish

6) Figure 5: the VIX is setting up too; remember tops are processes and bottoms are anevent.

7) The longer term measures, such as figures 6 and 7, are suggestive of a topping process.

8) Extremes are now seen in figure 6 and figure 7. Figures 6 and 7 are on the intermediateterm time frame (weekly).

9) The indicator value in figure 6 is > 60%; the value can go higher, mind you, as there wasa 66% reading in 2005. During that time when the indicator hit 58% the S&P500 was at1184; 8 weeks later the indicator hit 66% and the S&P500 hit a high 1217.

10) Figure 7 is a composite buying power indicator of my old version and the TradeKingversion (see the most recent special report). The red vertical bars represent those timeswhen the buying power was extremely low (on both measures). It is clear that the markethas continued to advance despite 5 extremes in this indicator over the past 6 months.But on closer inspection, the market really has stalled or sold off albeit for only several

weeks when this indicator hit extremes of low buying power.

11) I tend not to rationalize the data or indicators, so I am having trouble seeing whythis time will be different. Why ignore the data now?

12) So with this in mind, patience is important here. I would feel irresponsible if Irecommended to you to ignore both the short term and longer term signals from this data.Even if the markets moved higher over the short term, I feel that you would need tothread the needle to make money. This is very hard to do.

Lastly, just a reminder about accessing the material on the site. Some but not all of theusers of the site have had difficulty accessing reports via the link to Scribd. One, I make the link

private to protect my content and your investment in the service. Two, this appears to be random.Three, I have not found a fix either on the Scribd site or messing around with other browsers.Four, I dont have a solution.

So, if you are unable to access via the link to Scribd, just click on the HOME link in theright hand column and look below the FILES bar ; you will see a direct link to the PDF.This is very simple.

rydex report for 3.19.10

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