.png){kind=small}
Posts
.png)
.png)
Figure 1. S&P500/ daily/ Rydex Bullish and Leveraged v. Bearish and Leveraged
The current value of the indicator stands at 0.89 suggesting that the Rydex market timers are bearish, and this is a bullish signal. See the recent strategy piece on how this signal is combined with the 200 day moving average.
Lastly, it appears likely that I will be seeking "donations" from readers to support the research and time that goes into this blog. In return for your financial support, I will provide you a value added thank you, and it will be similar to the Rydex charts that can be downloaded at this link.
More to follow!
.png){kind=small}
.png)
7 comments:
look forward to donating,your view on things is always thought provoking and provides a perspective that's unusual.
thanks but that is too kind
The only question I have with this indicator is does it work similarly over a longer timeframe, and especially during a primary downtrend.
No such holy grail...and I have never passed this off as one...there are limitations as there have been several times in past where nothing worked....I did an article a while back and I cannot find it showing how the bullish and leverage v. bearish and leveraged behaved in all sorts of markets
I will try to find later...
Dave
Here you go....check this out on the Rydex Data:
click here
plus the strategy I outlined is filtered by the 200 day moving average click here for study
Dave: Here are my exact words from the article written on 9/30/2009 as pertains to the Rydex data:
"But before we finish this up, let me remind you that we haven't discovered the holy grail here. Figure 4 is an maximum adverse excursion (MAE) graph from study #2. If we look to the right of the blue vertical line, we note that about 10% of the trades had a trade down or maximum excursion beyond the entry point of greater than 6%. I would call a plus 6% draw down on a trade in the S&P500 as excessive and uncomfortable. Yet this is what we see with other sentiment data (i.e., like the "Dumb Money" indicator). Between 10 to 15% of the signals will yield draw downs that most traders find uncomfortable."
"This is not a holy grail, but yet one tool to position yourself against the vast majority of traders and investors who function in the markets without a plan or a strategy."
"The current value of the indicator stands at 0.89 suggesting that the Rydex market timers are bearish, and this is a bullish signal."
I'll wait exactly 6 trading days and that is the end of this week since these guys went bearish; see how this plays...
Still think we might need to go lower first then up in order to get a low entry risk? I saw the sentiment from last week, everybody's neutral; when don't know what to do, you can do 2 thing: do nothing or buy the SPYDER.
Post a Comment