Rydex Total Assets Update for Wednesday, January 31st 2001:
Regular Series:
SPX Long - NOVA 495.7 Million
SPX Short- URSA 224.8 Million
NDX Long - OTC 2,094 BILLION
NDX Short- Arktos 58.5 Million
XAU Precious Metals 47.2 Million
Banking 83.8 Million
Biotechnology 451 Million
Money Market 882 Million
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Dynamic Series (200% correlation)
SPX Long - TITAN 99.9 Million
SPX Short- TEMPEST 31.3 Million
NDX Long - VELOCITY 205.0 Million
NDX Short- VENTURE 46.4 Million**3.5 month high
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1)NDX Short Venture - the double your pleasure fund - has quietly snuck up to a 3 1/2 month high in TA these levels not seen since October 19th, 2,000 when the NDX closed at NDX 3,403. Dig a little deeper in the Rydex archives on MITA and you notice the prior 2 days also saw TA in this short fund eclipse 50 million in TA on the 17th and 18th of October. This was when we were going through the end of NDX's 2nd breakdown (the first breakdown in Mid April).
Now 1 day alone in and of itself does not make a significant sentiment difference. However, if the NDX closes weak tomorrow with another smart down day these TA in Venture will only rise and this is BULLISH.
All time high TA in NDX Short Venture was booked on Oct 11 and 12 (75 and 74 million respectively) and you recall the NDX rallied some 500 points intraday from bottom to top from Oct 13th to 20th. This is why tomorrow is so important.
Simply stated, tomorrow is a swing day on the rydex read. If the market closes weak, it will most likely be a good time to go Long the NDX for the following day. If the market bounces back hard tomorrow and finishes strong, it will be time to play the short side.
Near term, the market may fit into the every other day theory that gives fund switchers and traders fits. Up 1 day, down the next over the near term until sentiment read comes in more clearly. The trick is to do the exact oppositie the market is doing in the last hour of trading. If the market is down all day, buy in the last hour and sell into strength the next day in the afternoon. If it is up all day, sell into strength and raise cash for the next day.
Rydex sentiment becomes quite clear if we sell the next 1-2 days hard is to try and identify the bottom and reversal intraday and buy it up long for that run to NDX 2,958 - 2,972 gap that must be filled.
NDX closed at NDX 2,593 down 93 down 3.5%. NDX has good support at NDX 2,460 on a closing basis. It is possible to get a one day false reading break and close below this level but that will be it. The next trading day will close above this NDX 2,460 even though it may trade below this level all day long. Target is the lower gap that must get filled from Jan 16 close and Jan 17 open NDX (slightly filled by Jan 26 intraday low)NDX gap 2,470 - 2,526. Once this gap is filled the market is close to a solid buy reading.
charts-d.quote.com:443/981007735080?User=demo&Pswd=demo&DataType=GIF&Symbol=INDEX:NDX.X&Interval=60&Ht=400&Wd=600&Display=0&Study=RSI&Param1=5&Param2=&Param3=&FontSize=10&BgColor=0.255.0&TBgColor=0.255.0
The latest Investors Intelligence Advisory figures show way too much Bullishness from the previous week:
This Week Last Week
Bulls 61.0% 56.8%
Bears 30.0% 32.4%
Correction 9.0% 10.8%
2)NOVA/URSA did not get to that coveted 3/1 contrary ratio as the SPX closed down 8 points and this is to be expected.
3)Banking TA shrunk as BKX closed down 10. This is still BULLISH and there is no doubt in my mind BKX 1,000 will be eclipsed on an intraday high basis over the coming few days.
Position: 100% Long XAU Precious Metals
Best Regards, J.T. |
