Yes I am a critic of the Rydex numbers. If you can show me a correlation between the bullish or bearish inferences and what the market actually does thereafter, then I will have more faith in it.<<<<
Larry Mcmillan talks about a period in the market (i think it was the late 70's or early 80's when put/call ratios would turn the market on a dime when they got to certain levels, then those levels stopped working and everybody trashed the p/c ratios and said they didn't work anymore,
and they didn't work anymore in that way, sentiment moves with market trends, and bear (bull) trends end when the last person who wanted to buy a put (or call) or buy a short (or long) fund has bought, then it reverses.
so larry mcmillan uses moving averages of put/call ratios doesn't attempt to call a turning point in advance because of a certain level, but uses moving average cross overs and some other algorithms to spot turning points in the moving averages (not perfect either - nothing is), just as somebody who was a trend follower would be bullish if say the 20dma was moving up, neutral when the average is flattening out and bearish when it's moving down, larry mcmillan is bearish right now because the moving averages are headed downward.
There are some ways to use rydex ratios in st trading, carl swenlin uses volatility bands on the ratios to find st overbought and oversold conditions, last thursday and friday we got some extreme levels in rydex that were slightly below the area of the bottom in early feb that produced a 4-5 day rally, along with other indicators, that gave a good betting chance that the crowd had gotten too bearish and we were probably set-up for at minimum another bounce.
I don't think your comments to JT, or any other comments here are a personal attack at all and shouldn't be taken that way, i think most si people think that JT is pretty cool for providing a daily tally of the numbers and his take i do, i hope he takes any criticism as constructive criticism. |
