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Strategies & Market Trends : MP - Market Pulse

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To: JRI who wrote (727)7/18/2001 11:38:40 AM
From: s berg  Read Replies (1) of 1328
 
JT's rydex data is useful but I think you can approach it like stochastics, i.e. capable of staying oversold or overbought for some time. I wonder too about 401k investors, the opposite of the rydex group. There was a publicity blip last week about 401k investors starting to notice the decrease in year to year performance. If they reallocate out of the market even a small percent that could be a real force. Some companies, for example are implementing computer programs that alert their employees when they are overweight in stocks. Also, as longer term unemployment ratchets up you would think this impacts the 401k investment pool. Hopefully, this will effect will reverse soon. But in the meantime it could propel the market lower even after all of the rydex investors are out.

Another way of looking at Rydex investors is as market liquidity. There was some interesting posts about the fed injecting liquidity last week. Yet, the market has not rallied as much as some were expecting. This would be c/w the idea that after a bubble bursts it has difficulty attracting liquidity.
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