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: Shack who wrote (113373)	2/9/2005 2:17:53 PM
From: Henry J Costanzo	Read Replies (2) \| Respond to of 209892

Rydex......Sorry, Shack....Seem to have started something without being aware of what I was getting into....Went back to the article to see if there was anything else which might help, and here's some more. There will be a second continuing article tomorrow, and I will bring you up to date on it <<How do I use the data from the bull and bear funds? I construct an indicator that not only looks at the raw ratio of assets of bulls vs. bears, but also measures the difference between the two assets looking to identify extremes in the data relative to past occurrences. This information is shown below in a daily chart of the Nasdaq 100 Trust (QQQQ:Nasdaq - commentary - research)...... ........So using the Rydex asset data, it appears that we've defined a market environment where there is too much optimism or pessimism, and knowing that extremes in sentiment are rarely rewarded, we should look to take the opposite side of the trade. Do we jump in and blindly bet against these wrong-way traders? Of course not! Next time, in the second of this two-part series, I'll explore how the market performs when there is this much bullishness among Rydex market-timers. The results of that study will surprise you....>>