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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: LTK007 who wrote (31925)2/23/2002 4:06:04 PM
From: Psycho-Social  Read Replies (1) of 99280
 
New Vision & Itsallover re: Maybe the Rydex funds are not contrarian indicators at all.

While in the research dep't of a money management firm, I reviewed historical data on a dozen or more sentiment indicators, including the Rydex fund flows. I found the Rydex funds correlated poorly with the S&P and Nasdaq as contrarian indicators. A much better inverse correlation with the Nasdaq was obtained by using Tech Sector inflows/outflows and Aggressive Growth inflows/outflows. The company bought the historical data, but it's expensive.
Although AMG Data has publicized continuing outflows from Tech funds, and the outflows are a positive factor, the magnitude of the outflows is important, and that's usually not published. At the coming lows, I'd expect a week of $500 million to $1 billion outflows from Tech Sector funds. (Still trying to find out how high the Tech Sector outflows were in mid-Sept '01)
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