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To: chainik who wrote (130571)	3/10/2006 10:58:08 PM
From: Henry J Costanzo	Respond to of 209892

<<Seriously, our views seem to be pretty similar ->> Well......chainik and Shack........don't pretend to have grasped all that sentimentology verbiage you two have exchanged.........but certainly surprised to read THAT sentence.......LOL

To: chainik who wrote (130571)	3/11/2006 4:51:38 PM
From: bcrafty	Read Replies (2) \| Respond to of 209892

chainik, Shack, crustoldprospector, another aspect of the Rydex ratio discussion. First, thanks chainik for posting the articles that got the discussion started. They all help to illustrate aspects of the indicator that we have discussed on the board several times before. Although this might muddy the waters rather than clarify them, I wanted to add this - what the charts don't illustrate is how much of the Rydex assets are actually a hedge. In other words maybe the Rydex trader is still hanging on to his GOOG and QQQQ and other longs a speculative positions, but additionally he is buying the Rydex bear fund as a ST hedge. This would make sense because in many retirement accounts (for US citizens, anyway) one can't short stock, however he can go long on RYURX as a bear bet. And having been burned in 2000, possibly more J6Ps and their advisors have tried to prevent the possibility of a substantial loss happening again by using hedges. Also I think that failure to account for hedging is what leads many people to misinterpret the COTS and thus draw incorrect conclusions from them. Some might try to use the COT as a directional indicator and (at any hypothetical time)read the COTS and think "the commercials are getting increasingly short the SPX, therefore they think the market is going down" when actually the commercials are merely hedging positions, whether it is their own positions or others' positions.