On Monday, traders in the Rydex family of mutual funds reached a near-record level of bullishness.
The chart below shows the Bull Ratio for all the index funds. This is the total assets in the long funds for the S&P 500, Nasdaq 100, DJIA and Russell 2000 divided by the assets in the inverse funds for those same indexes.
As of Monday, there was $4 invested in the long funds for every $1 invested in the inverse funds. The only other time since 2004 that matched this level was May 2, 2011.
As of Wednesday, total assets invested in the inverse funds at the Rydex family fell to $291 million. That ties it for the lowest all-time, along with January 30, 2001 and May 2, 2011. Both dates were good times to own those funds.
Images: Flickr (licence attribution)
About The Author
Sundial Capital Research, Inc. is a company dedicated to the research and practical application of mass psychology to the financial markets. Sundial publishes the sentimenTrader.com website.
The work of Sundial Capital Research has been mentioned in publications such as Barron’s, CNN, CNBC, SFO Magazine, The Economist, Reuters, The Wall Street Journal, Active Trader, Futures, TheStreet.com, TradingMarkets, and many others.
Sundial Capital Research founder Jason Goepfert won the 2004 Charles Dow Award for excellence in technical analysis from the Market Technicians Association. SentimenTrader.com won the award for Most Useful Website for Traders in 2008 from SpikeTrade.com.