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.

Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: AllansAlias who wrote (53267)	9/14/2002 10:27:14 AM
From: John Madarasz	Read Replies (1) \| Respond to of 209892

duly noted...thxs. here's some text from an interesting message i recently read on another board... I always look forward to reading your posts. You do come up with some of the most intriguing facts. I do like your 566 and I of course can't help but like the 74 squared number of calendar days from the top of Aug 25th 1987 to the current high of Aug 22nd 2002. What I do find very interesting is the fact that we are in the time frame of a 4 year cycle low. That is the severest part of the 4 year cycle down pressure all compacted into a short period of time. If we saw the low on July 24th, the rally off of that low, even with extreme left translation, should last 10 to 12 weeks. That would suggest a test of the lows in a B or an X wave to be followed by a C wave or second ABC before turning down again on its path towards zero. If we have not in fact seen the lows, and a test of the lows is not what we are doing, as the Elliott count does look impulsive to the down side, then looking at the VLE, SML, and MID and the fact that their all-time high was made in April-May of this year, we could be in the early stages of a 3rd wave down. or a powerfull C wave that is part of a series of ABCs to the downside. Either way, the next month or two are going to get very interesting.

To: AllansAlias who wrote (53267)	9/14/2002 10:58:17 AM
From: Killswitch	Read Replies (1) \| Respond to of 209892

AA be careful not to let Rydex data alone shake you out of being short. The fact is that for this whole year it has been making a series of higher highs and lows in the charts of the ratios of the shorts vs longs assets. I think this pattern is fully capable of continuing into the bear market bottom.

To: AllansAlias who wrote (53267)	9/14/2002 11:09:16 AM
From: jjstingray	Respond to of 209892

AA, maybe that portends a short term rally, ie: options ramp. Once Rydex starts to get too bullish, we get our big decline.

To: AllansAlias who wrote (53267)	9/14/2002 12:39:05 PM
From: marginmike	Read Replies (3) \| Respond to of 209892

Allan Rydex has been smart money for the last year or so. I think as a contrarian tool its useless. In the past on numbers like these we would be on the way to the moon.

To: AllansAlias who wrote (53267)	9/14/2002 1:44:27 PM
From: skinowski	Read Replies (1) \| Respond to of 209892

One more thing – a speculation, which I’m not sure how to prove… I suspect that in a large part Rydex switchers do not trade on their ‘gut feeling’ anymore, but rather on advice of some very sophisticated timing services, like 21 Century, Dorsey-Wright, and others. The extent to which this is true, and the impact it would have on the validity of the Rydex ratio as a timing instrument – that, I’m not sure about. A guesstimate would be that it might be substantial.

To: AllansAlias who wrote (53267)	9/14/2002 4:38:15 PM
From: High Country Trader	Read Replies (1) \| Respond to of 209892

Are the Rydex ratios more bearish than in early April 97 where there were 3.48 to 1 more assets in bear funds vs. bull? I don't think so. The Rydex ratios have never been tested in a real bear market. I've always thought they could reach unimaginable levels in a prolonged bear. That's probably one reason I seldom look at the Rydex ratios are the put/call ratios any longer. Then again, I'm very anti-indicator so take what I say with a grain of salt. Trading is an art and primarily a psychological game so if you do well interpreting and then trading off various indicators that's all that matters.

To: AllansAlias who wrote (53267)	9/14/2002 5:26:05 PM
From: bcrafty	Read Replies (1) \| Respond to of 209892

Allan, I'm probably reading too much into you posts on the sentiment from the Rydex numbers, but I feel a sense of urgency to your posts, about being short right now (meaning for the next few days) or initiating new short positions right now. I think this is important to many ST traders here, because on many of my trades I'm more concerned about what might happen in the next day or two rather than the next two weeks or two months. My reading of the technicals still favor more down. Although I'm not saying "Damn the Rydex torpedoes, full speed ahead on the shorts" for many of us short term traders, even extremes might not be of great relevance, but instead only a secondary indicator with technical indicators being primary. I think that it's good to remember the following thoughts from the "must read" link at the end of John's IIA post: "Bullishness or Bearishness can persist for a long time and extreme readings need to be confirmed by other technical indicators. The peak in Bearishness can also precede the actual top or bottom by a long time. In the 1981-82 Bear Market the peak reading for Bears was 60.9% on 3/26/82, about 4 months before the actual market low in early August. By the time of the August lows the Bears were just over 40% and some advisors used the 20% drop in Bears as evidence to stay Bearish. But not us, our technical indicators were screaming buy and we went 100%invested just before the lows. At end of 1994, we had two weeks in a row of 59% Bears as part of a streak of 45 weeks in a row of more Bears than Bulls. We also had a record number of selling climaxes that month and, again, our technical indicators were screaming Buy and we jumped in with both feet."