Rydex Report for 5.11.11

8/6/2019 Rydex Report for 5.11.11

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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: 2.87

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 withexcessive 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


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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 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


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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 money

market 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)


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My Comments

1) Another up day on weak volume

2) This is reminiscent of the run up in late April to the early May highs

3) There was a sudden sell off that was quickly bought sentiment remained extremelybullish

4) The ascent in late April was on decreasing volume

5) Once again, prices are moving back towards the May highs on light volume

6) Looking at figure 5a we note that resistance for the SPY is 136.6

7) Looking at figure 5b we note that resistance for the QQQ is at 59.31

8) Of note todays high in the QQQ was 59.28

9) From my perspective, the continued ramp on decreasing volume and increasing bullish

sentiment has become increasingly frustrating as day after day I must tell you how bearishthis is

10) But it doesnt matter to the market but at some point it will

11) You could argue that I should trade what I see (i.e., an uptrend) not what I believe is goingto happen

12) And that is my point here.despite what I see, I am unwilling to throw caution to the windand just load up because the market never goes down

13) I really dont have an opinion either way nor a crystal ball

14) The odds are that fear and greed will play out like it always does


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11/11

Documents

Rydex Report for 5.11.11