Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: timers who wrote (67753)	2/14/2001 5:52:04 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 436258

there has been a significant outflow of money from the entire Rydex complex...that is why i'm usually watching a ratio rather than the absolute asset values. an additional problem is that when watching the asset values of e.g. the 'velocity' type funds (that try to capture twice the performance of the underlying index) , those values decline significantly on any market decline, without a red cent leaving the funds. the observation on the low level of money market funds within Rydex is probably more pertinent, as the value of these assets is not fluctuating along with the market, i.e. only true money flows are recorded. another point are the countless sector funds - bull assets of all general index and sector funds combined got added to on yesterday's downdraft - and that includes the drag induced by the change in index levels. since the overall Rydex ratio FELL by 0,03 ( a HUGE one day move) on a day when ALL indices were lower, a big shift into bull funds must have taken place. since the velocity, titan, etc. funds didn't get much fresh money, it must have been put into specific sector bull funds. this makes no difference - it still means most participants have elected a bullish stance. the complete Rydex picture is as follows: the pure bear/bull funds ratio is at 0,14 (14% of assets in bear funds, 86% in bull funds) adding money funds to the bear funds and dividing through bull funds results in a ratio of 0,43. 66,2% of all bull assets are in tech, which is low by recent standards, but very high historically when one looks at the long term record (tech was 20% of bull assets at the '98 low). this is not a bearish extreme - however, it IS an extreme in light of the market action. all that said, the boundaries for the ratio have shifted upward since the NAZ blow-off in early 2000. 'oversold' bottoms in the ratio used to be overbought tops before. in a true panic, these ratios go to entirely different levels - you'll see bear assets GREATER than bull asset at a true capitulation bottom. one more thing: i also see a final capitulation sell-off materializing before an intermediate term low is put in, so i agree in that sense. i also think it's not too far away in time (one of the next cycle turns should produce the low - either Feb. 23 or March 8, which is also on the radar screen). however, who knows what kind of a low it will be price wise. it could be a lot lower than current levels.