• 14 hours What’s Next In The Trump vs. Twitter Drama?
  • 2 days Escalating Tensions Could Crush $52 Billion China-U.S. Energy Deal
  • 2 days The Fed Is Printing Money At Unprecedented Levels
  • 2 days How Is The Real Estate Market Handling COVID-19?
  • 2 days Gold Flat As Markets Await Fed Chair Speech
  • 2 days What Is Day Trading And Is It Right For You?
  • 3 days Energy CEOs See Big Payouts Despite Oil Price Crash
  • 3 days Saudi Arabia Is Fighting A War On Two Fronts
  • 3 days 40 Million Jobless As Pandemic Fuels Economic Collapse
  • 3 days What Do India's Latest Reforms Mean For Its Coal Industry?
  • 3 days Copper Glut Continues To Grow
  • 3 days How A Pandemic Made Americans Better Workers
  • 3 days The Trillion Dollar Space Race Crosses Another Milestone
  • 4 days Gold Prices Fall As Stock Market Sentiment Turns Positive
  • 4 days Conspiracy Theories Set Tone For 5G Cold War
  • 4 days Working From Home Will Transform The Energy Industry
  • 4 days The Multi-Billion Dollar Race For A Vaccine
  • 4 days Can Domestic Tourism Bolster Emerging Economies?
  • 4 days Australia Considers $100 Million Investment To Kickstart Mining Industry
  • 4 days Has Re-Opening The Economy Been Successful?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

I Hope You Were Not One of Those Buying

Monday's market action saw some of the strongest buying amongst the Rydex market timers in over 10 years. Oops!

Or to put it another way, I hope you were not one of those buying the market on Monday like the Rydex market timers. But if the Rydex asset data is any indication, it was likely that you were. Oops!!

The Rydex market timers represent a small segment of the investing world. Nonetheless, their actions remain a useful window into the mindset of investors. In addition, the Rydex asset data is sentiment data based upon real asset flows not an investor opinion poll. By tracking the money, we get to see how these investors are placing their market bets. Figure 1 is a daily chart of the SP Depository Receipts (symbol: SPY). The indicator in the lower panel looks at the ratio of the assets in the Rydex bullish and leveraged funds relative to the assets in the bearish and leveraged funds. Not only is this indicator useful to determine which direction investors are leaning, but we also get a sense of conviction to that bet because they are utilizing leverage.

Figure 1. SPY/ daily
SPY Daily

After Monday, the value of the Rydex bullish and leveraged to bearish and leveraged ratio was 3.70. This was the highest value this ratio had since the rally began in March, 2009, and it was the highest value since 2001. As I stated in the comments to our Premium Content service:

"These market timers are so confident in their market outlook that they are expecting only one outcome," and I went on to pose the following question: "When have you known the market to ever be a sure thing?"

My brief but full comments from Monday evening's report are posted below.

Figure 2. My Comments
Monday Comments

 


The Premium Content report is a daily report looking at the Rydex asset data. We have over 10 years of data cover 2 bull and 2 bear markets. A subscription is $104/ year, and it will be the best $104 you will spend on market data. For details, click here.

You may access Monday evening's report at: Rydex Report for 5.3.11

 

Back to homepage

Leave a comment

Leave a comment