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Trading Lessons

Stock Market Rydex Bull Bear Investor Sentiment Ratio

Stock-Markets / Stock Market Sentiment Jul 16, 2010 - 11:24 AM GMT

By: Guy_Lerner

Stock-Markets

Every week I present the following chart in our sentiment round up. See figure 1. It is the Rydex total bull to bear ratio. The indicator in the lower panel of figure 1 measures all the assets in the Rydex bullish oriented equity funds divided by the sum of assets in the bullish oriented equity funds plus the assets in the bearish oriented equity funds. When the indicator is green, the value is low and there is fear in the market; this is where market bottoms are forged. When the indicator is red, there is complacency in the market. There are too many bulls and this is when market advances stall.


Figure 1. Rydex Total Bull/ Bear Ratio/ weekly

In general, the indicator is responsive enough that it tracks price changes relatively quickly. However, over the past two weeks the indicator has headed lower while prices have headed higher. This is unusual. In other words, the Rydex market timers have not been buying into the rally. Typically, these traders are wrong on the markets, but they have yet to turn bullish despite the 10% gains over 10 trading days.

These research notes, which you can access below, on this interesting divergence were presented three days ago to subscribers of our Premium Content service. The Premium Content service is the best $104 you will ever spend on market research. The daily report is meant to keep you on the right side of the market and improve your market timing. That's 40 cents a day!

Improve your market timing withPremium Content from TheTechnicalTake. For a nominal yearly fee, you will get a unique data set that will show you which way investors (i.e., bull market geniuses) are leaning.

It is independent and original market analysis. To view a recent report click: REPORT.

By Guy Lerner

http://thetechnicaltakedotcom.blogspot.com/

Guy M. Lerner, MD is the founder of ARL Advisers, LLC and managing partner of ARL Investment Partners, L.P. Dr. Lerner utilizes a research driven approach to determine those factors which lead to sustainable moves in the markets. He has developed many proprietary tools and trading models in his quest to outperform. Over the past four years, Lerner has shared his innovative approach with the readers of RealMoney.com and TheStreet.com as a featured columnist. He has been a regular guest on the Money Man Radio Show, DEX-TV, routinely published in the some of the most widely-read financial publications and has been a marquee speaker at financial seminars around the world.

© 2010 Copyright Guy Lerner - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Guy Lerner Archive

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