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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: mtnlady who wrote (4013)	7/29/2000 10:05:00 PM
From: bobby beara	Read Replies (2) \| Respond to of 19219

Mtn Lady, i don't know where to start so i'll start at the beginning. The theory of contrary investing states basically that when everybody is bullish, all the money is in and the market has a full supply of sellers and no buyers and must go down, when everybody is bearish, everybody has sold, so the market has the reverse of the demand supply equation at the top. Some people believe news items turn markets, i believe the demand/supply equation turns markets, also there is a cyclicality. The rydex funds are used as a proxy for the market (as are put/call ratios and sentiment polls, etc.) to find out when people are too bullish or too bearish. T/a's try to find extremes so they can have a past measure to compare when a market is overbought and oversold. Those peak and trough figures are recent tops and bottoms, and may or may not be useful in trading, but could be used in conjunction with other indicators to make a case for a rally or a decline. I don't try to read too much into sentiment swings on a daily basis, until it gets really extreme, because between the extremes are trends and trends go farther than most believe. nova is the spx bull fund ursa is the spx bear fund otc is the nasdaq 100 long fund arktos is the nasdaq bear fund. the dynamic funds are leveraged close to 2 to 1 bull&bear money market - cash. the ratios are showing a percent of bullish money divided by bearish+bullish money one ratio adds the money market into the bear camp, because people who are raising cash are at least cautious, but not outright bearish. My interpretation: The one SORE THUMB about this ratio that stands out to me and it has for a long time is the ratio of otc bull to bear. This has been overbought for over a year, and never really got that bearish at the april/march bottom. There will be a payback for this lengthy period of bullishness, it's yin and yang, the yang will produce a lengthy period of bearishness, which imo could have started at the march top. welcome. b