Rydex....Bearish
Don't follow this kind of stuff....but some of you do.....so thought I would post some of something I was just reading.....together with a chart.....
<<Currently, with almost 60% of assets in bullish funds and with bullish and bearish assets at opposing extremes, the composite indicator is in a very bearish position. That is, according to this indicator, too many Rydex market-timers have bought into this rally and too many assets are in bullish funds relative to the bearish funds.
Looking at the aforementioned chart, you will also note that from July 2002 until October 2003, the indicator was usually above the midline. This was mostly because during that time frame, the amount of assets in the bullish funds was less than 50%. That is, during the 2003 bull run, the Rydex timers did not buy into the market. By the time they embraced the rally in October and felt it was safe to jump in the water, the party was beginning to wind dow
Now look at where the indicator was for much of 2004: below the midline. In this instance, Rydex market-timers were mostly bullish on the market, with greater than 50% of assets in the bullish funds. The exceptions to this led to tradeable rallies in May and September of last year, when bullish assets amounted to less than 50%. The most extreme reading in the indicator for the entire year -- bearishness among these wrong-way investors, and bullishness for stocks -- was at the August 2004 low.>>
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