Rydex Total Assets Update for Friday, February 1st, 2002:
Revised with Commentary
Regular Series:
SPX Long - NOVA 245.4 Million**BULLISH Inversion
SPX Short- URSA 271.4 Million**BULLISH
NDX Long - OTC 893.5 Million**BULLISH
NDX Short- ARKTOS 153.4 Million**BULLISH Highest close
since 09/18/2000
RUT 2000 - MIKROS 70.4 Million**BULLISH
XAU Precious Metals 75.3 Million**BEARISH
XOI Energy 14.6 Million**BULLISH
OSX Energy Services 23.0 Million**BULLISH
BKX Banking 25.2 Million**BULLISH
BTK Biotech 282.4 Million
Money Market 1.522 BILLION**BULLISH Overbought
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Dynamic Series (200% correlation to Index)
SPX Long - TITAN 91.7 Million Inversion
SPX Short- TEMPEST 161.6 Million**BULLISH Near All Time Highs
NDX Long - VELOCITY 183.9 Million**BULLISH Inversion
NDX Short- VENTURE 215.3 Million**BULLISH All Time Highs
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It is easy to be Bearish this market. Any could come up with 100 reasons why the market is going lower. Chief culprit Enron-itis will hit the market again tomorrow commencing with Ken Lay, former Enron chairman, testifying before Senate committee. And most likely the broad market will trade lower for the day as a result. If it does not trade lower tomorrow against a negative backdrop everywhere on the airwaves, the Bears will be in serious trouble as steel cables arguments will turn into spider webs with little time to spin the web before their 'party' ends.
Now lets talk about some of the positives.
1)Little press will be given that S& P Earnings were revised UP in Barrons this past week and all of a sudden the P/E ratio is down to 28.57 from 40.03 last week (as reported in Barrons). We all know from a historical level this P/E ratio is high but I note one that earnings will be revised once the rest of excess inventory is liquidated in the next two quarters and two dividends relative to T-Bill yields are in line with past Bear market bottoms '90, '87, '82 etc. courtesy of Gerald Appel.
2)A/D Line continues to move up and make new highs as new highs beat new lows by more than 2 to 1 in both the NYSE and COMP in a week where Bears where foaming at the mouth of collapse. Nice washout of weak hands and reversal from SPX 1,081, no? (Please note, I have stated quite clearly (before the wash-out occurred) we have an outside chance of the market putting in a lower low at SPX 1,060 area at some later date.).
Message 16981428
3)Lead sled dog index small caps RUT 2000 is comfortably above both the 50 and 200 day MA's. Two back to back closes above RUT 490 will give an all clear message that the broad market is going higher as this is the area of the break noted by famed Ms. Helene Meisler on 1/11 and will escape most radar screens except...
4)Lead tech sled dog index SOX is also above both the 50 and 200 day MA's and has closed above important SOX 550 for two consecutive days. We may fall back below this level for a day maybe two, but my bet is SOX will take out SOX 600 before the johnny come lately pile onto the party. Oh, and by the way, SOX closed UP 5.7% for the month of January.
5)Very few take notice that copper bottomed in November and is up nearly 14% off the lows.
charts-d.quote.com:443/1012768345140?User=demo&Pswd=demo&DataType=GIF&Symbol=COMEX:HG02H&Interval=D&Permission=259463&Ht=400&Wd=600&Display=0&Study=&Param1=&Param2=&Param3=&FontSize=10
Ditto for steel prices. They have bottomed, firmed and have turned back up. Both are necessary ingredients for industrial production to pick back up and spur economic growth that will have multiple waterfall spillover effects as it sifts down through the economic supply chain. Coal and energy prices have already come out of the dark (see Barrons). Modest inflation is gaining underlying strength and this is Bullish for the market. Globally, Euro-zone (12 nations) inflation rose in January and is the first pick-up in eight months.
6)The 6 month ECRI Index (Economic Cycle Research Institute)rose 2.1% the highest since April 2000. The weekly index fell to 119.4 and is showing signs of bottoming.
7)Lower interest rate cuts for all of 2001 are starting to gain traction. Housing affordability index rose to 146.8 in 4th quarter. This is the highest reading 1973 thanks to low mortgage rates and falling prices according to the National Association of Realtors.
8)DOW sidekick and little discussed TRAN is above both the 50 and 200 day MA and closed smartly above 9/7/01. Considering the catastrophe this industry has gone thru, this is a remarkable feat. Oh and by the way, TRAN was up 5.6% for January. DOW Theory anyone?
thedowtheory.com
9)Other little discussed indicators UP for the month of January include RLX, CYC, CMR, CRX and the XAU (sniff sniff - the pullback commences next week).
I could go on, but the Superbowl commeth.
Regular Series: 100% Long NDX OTC
Dynamic Series: 100% Long SPX TITAN
Best Regards, J.T. |
