Rydex Total Assets Update for Friday, October 6th:
Regular Series:
SPX Long - NOVA 413 Million
SPX Short- URSA 310 Million
NDX Long - OTC 2,666 BILLION
NDX Short- Arktos 144.4 Million
XAU Precious Metals 25.7 Million
Biotechnology 622 Million
Money Market 1,466 BILLION
***********************************************
Dynamic Series (200% correlation to index)
SPX Long - TITAN 88.9 Million
SPX Short- TEMPEST 19.6 Million
NDX Long - VELOCITY 69.0 Million
NDX Short- VENTURE 57.5 Million
**************************************************
Let me work backwards first with the SPX dynamic series...
SPX Longs show no capitulation whatsoever and this is simply baffling. Maybe it is because longs are waiting for the bounce to cushion the losses. This mentality is like a gambler who continues to lose and double up his bets only to magnify the already grave situation. Dynamice Series is 200% correlated to the index so in this case if the SPX was down 1.9% you can double this loss to 3.8% in dynamic series.
The last time SPX dynamic series was inverted where the spx bear funds (tempest)total assets were greater than the spx bull (titan) fund was on september 15th when the SPX closed at SPX 1,465 after booking SPX 1,520 on september 1...
The regular series is older money and SPX Long NOVA Fund is finally showing capitulation in total assets as it has not reached these low asset levels since I have been keeping track. Looking at NOVA total assets alone, it would suggest we are ready for a hard bounce on monday... But when you add SPX Short URSA into the mix we see assets at a paltry 310 million. It was at 327 million on 9/26 when SPX closed at SPX 1,427. Today we closed at SPX 1,409. The last time short fund URSA booked 2 consecutive closes above 300 million in total assets was on 8/8 thru 8/10 when the range was 312-325 million total assets. SPX closed at SPX 1,482-SPX 1,460 in this 3 day period. The last time we closed at 350 million in total assets in short bear ursa fund was on 7/24 when SPX closed at SPX 1,464. The highest total asset level in URSA over the recent past was booked on 5/17 when total assets spiked at 421 million when SPX closed at SPX 1,447.
What does all this sentiment picture tell us?
The money still doesn't want to play the short side in mutual funds and is very uncomfortable making the switch to the short bear side...
The same can be said in NDX Short Arktos Fund vs the billions in the NDX Long OTC Fund...
Again, I reitterate, In October '98 Rydex SPX URSA Short assets were greater than SPX Long NOVA total assets and the "invested money" was fighting the primary trend on the way up in the midst of the correction. Now, in Oct '2000, the money is fighting it on the way down as the money continues to play long in the face of lower lows booked on SPX.. This spillover effect will be quite pronounced in NDX if NDX breaks the psychological NDX 3,000 level on a close... NDX closed at NDX 3,312 today... It came close to breaking NDX 3,000 close on May 23 when NDX closed at NDX 3,023 and NDX Long OTC total assets booked 2,477 BILLION total assets. This is the magic number for the hard break..
I will analyze the support and resistance levels for the DOW, SPX, NDX, BKX, UTIL, IIX et al in another post later this weekend and try and post new anticipated levels to look for during the coming week...
Best Regards, J.T. |
