Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Figure 1. S&P500/ daily/ Rydex Bullish and Leveraged v. Bearish and Leveraged
The current value of the indicator stands at 1.34. As suspected, this turned out to be an isolated bearish bet rather than increasing fear and a move to the sidelines by these market timers. In any case, this now represents a short term sell signal. See our recent strategy piece on the use of the Rydex leveraged assets.
You can view the 5 chart set of Rydex graphs that in all likelihood I will be offering as a value added thank you to those subscribers who make a financial donation to support the blog. More to follow later in the week!