Rydex Total Assets Update for Tuesday, November 28th:
Regular Series:
SPX Long - NOVA 365.1 Million
SPX Short- URSA 291.7 Million
NDX Long - OTC 2,099 BILLION
NDX Short- Arktos 116.1 Million
XAU Precious Metals 39.6 Million
Biotechnology 571 Million
Money Market 1.415 BILLION
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Dynamic Series (200% correlation)
SPX Long - TITAN 81.9 Million
SPX Short- TEMPEST 11.1 Million
NDX Long - VELOCITY 89.8 Million
NDX Short- VENTURE 30.5 Million
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The election circus continues. Gore is behind the 8-Ball and now you see him twice in the last 24 hours. If Gore takes this to the limit to December 12th and beyond, if this circus is still going, he is committing his own political suicide opening the window of opportunity for a new democratic candidate in 2004 and that is Hillary Clinton. If he takes the high road and sees the writing on the wall and concedes, he insures his political future on any Bush default in the white house in 2004 over the next 4 years. And it would commence this massive relief rally.
Now to the markets.
Last Wednesday, rydex numbers and market indices clearly showed capitulation and a relief rally ensued on Friday for a 6%NDX gain and 1.5% SPX gain. Today, NDX gain has been wiped out. The SPX is still 1% higher from fridays rally close. I said the Bears would get pounded in this counter-trend bounce as this endgame neared conclusion. However, the Gore spin machine continues and does not want to give up the ghost of christmas future. Now the American people voice their opinion in the polls and it is clear the American majority believe Bush won. Gore doesn't want to hear it because the latest poll doesn't measure up with the votes gore thinks are his and doesn't conform to his belief that he has the winning hand when all he has left are a pair of jokers. Gore's wildcard is in Seminole County where his operatives are trying to get 4,000 Bush votes thrown out. If this happens, and Gore snatches away the election, I think the question of legitimacy will dog him for the next 4 years. And this mood of distrust and retrenchment will permeate the market like a slow, cancerous death. And I think the market will break lower supports and head back below august 99 support levels into a grind down process.
The albatross continues to overhang the markets.
Today we have the core SPX holding support at higher lows from last wednesday close and buffered by higher lows in the DOW, BKX and XBD. This is in contrast to todays lower lows in COMP, NDX, IIX, PSE and the hard breakdown in SOX.
November 22nd November 28th close 5 Day RSI
SPX 1,322 1,336 40.85
DOW 10,399 10,508 44.17
BKX 774 797 45.69
XBD 509 514 25.06
COMP 2,755 2,735 27.44
NDX 2,668 2,621 27.98
IIX 330 328 25.02
PSE 859 849 30.39
SOX 620 577 27.97
XAU 45.13 47.09 80.71
Now for rydex:
1)SPX Long NOVA TA at higher low capitulation levels again and this is confirmed by the higher close in the SPX itself. Bullish. Why? In the face of doom and and dismay we have held support levels. On any kind of good news or whiff of actual political endgame, we will have a melt-up.
2)SPX Short URSA TA building at higher close from nov 22nd close. 292 vs 272 total assets. Bullish. The higher the number goes, the more bullish it is over the immediate term. Still Bearish over the medium to long term.
3)NDX Long OTC TA lower than nov 22nd close. More importantly closing in on taking out 2 Billion in total assets which hasn't happend since pre-October 99. Bullish.
4)NDX Short Arktos levels rising. Bullish
5)XAU Precious Metals total assets have spike up over the past 2 days big time. And rightly so as it has netted 6% in the past 2 days as the dollar has fallen from its lofty perch. Clearly Bullish and in double overbought levels but can still go higher tomorrow. XAU action very Bullish and similar to bottoming process that took place in june july 1982 action of the DOW before it took off in august and has never looked back. Now the DOW is looking "back" to the 'future'. Bullish.
6)Money Market TA back above 1.4 billion. No surprise here. Bullish.
7)The Dynamic Series confirms the regular series as we are decisively back below 100 million in both long funds. However, SPX TEMPEST short fund total assets still TOO LOW.
In sum, I am still expecting a counter-trend bounce. BKX must hold above BKX 774 close and we have good elasticity here. If this level is decisively taken out and sliced like a hot knife thru butter - it will be the last sign to head for cover- and the assault below SPX 1,300 will be on.
Still long 50% SPX and 50% NDX respectively.
Best regards, J.T. |
