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

To: Wyätt Gwyön who wrote (5327)	11/27/2000 11:35:22 AM
From: Bag of Pucks	Read Replies (1) \| Respond to of 19219

re: bears being pounded.. doesn't look like a pounding is taking place today... nasdaq will have to move above 3,000-3,050 to break out of the downward trend.. then maybe we will see some pounding..

To: Wyätt Gwyön who wrote (5327)	11/28/2000 2:24:35 AM
From: J.T.	Read Replies (1) \| Respond to of 19219

Mucho Maas, I understand how you are using the Rydex figures to gain a short-term directional reading, but how do you put that direction into the context of a counter-trend? The countertrend is based on some of the various sentiment measures that I discussed in this MITA post 5299: ...<What is the best indicator of when the turning points start, Put/Call? High Put/Call equity/index ratios, Rydex Capitulation of Long Funds and increased money market levels, high VIX levels above 30, TRIN levels above 1.10, and double oversold positions on the 5 day RSI levels among the leading market indices that I follow. All of these sentiment measures were achieved today. We are gona to commence an imminent rocket launch rally over the next trading day or so and will last into the first week into December>... I.e., do you see the medium- or longer-term direction as downward (in spite of the short-term bullish posture you accurately predicted Wednesday), and if so, are you basing that on the Rydex figures or something else? Medium term I think we are going lower as rydex numbers still way too complacent and nowhere near october 98 bearish levels when the market dip was always bought with renewed vigor beyond 1-2 day rallies like today. Long term I still think we go lower unless market discounting machine beats down overly optimistic earnings expectations. Growth has clearly plateaued and you don't hear much about the "new paradigm" new age stealth economy or market like you did from the ocotber 99 thru March 2,000 parabolic blow-off where the market seemed more invincible than the titanic. Earnings are going to stagnate over the next 3 quarters and will not be able to sustain the growth momentum in 99' In spite of medium and long term lower forecasts, money can still be made in these countertrend rallies but it must be a disciplined traders market and not one you marry. It will be a stock pickers market and a general mutual fund nightmare where most fiunds will underperform the SPX 500. One other question--you've mentioned the Rydex figures as mimicking the large speculators, who are countered by the commercial traders. Who exactly are these large speculators, and who are the commercial traders? I am trying to understand their difference in the financial food chain. For me, rydex mutual fund switchers are synonymous with the large speculators who are long the SPX contract and taking the opposite view as the commercials. Why? First, mutual funds are typically for buy and hold investors - not traders or mutual fund switchers who trade in and out of these funds daily or weekly. And as you can see by the daily rydex updates, money is moving in and out of long and short funds everyday. Second, in october 98 rydex money was heavily short just as the large specs were. Commercials were long. Today large specs are long just as rydex funds are heavily long - commercials are short. So think of these rydex funds as a large spec daytraders fund. These large specs think they can outperform the market buy being able toi have the flexiblity to move money around as often as they like. Funny part is, they tend to be wrong more often than they are right. That is why I use rydex as a contrary indicator. Best Regards, J.T.