Short-term Risk Level: 5
Pretty much the same story as yesterday - the price pattern and history of pulling back after Apple earnings suggests a
multi-day pullback is most likely. This is still within an overall
positive multi-week timeframe, so we'd expect the next set of oversold
readings to lead to another rebound.
Traders in the Rydex family of mutual funds on
Tuesday rushed into the
Nasdaq 100 long fund. Assets have jumped more than 40% just this
There is now 45 times more cash invested in that
fund than the inverse fund, which is on a par with other peaks over the past
year. The other times it jumped to this kind of extreme were 2/8/11,
4/27/11 and 7/12/11, all of which led to multi-week slides in the Nasdaq 100.
On the bright side, the Bull Ratio in the
leveraged Nasdaq 100 funds remains very low, so we're not seeing these traders
become overly bullish (or bullish at all) in the leveraged funds, unlike the 3
occurrences noted above.
few weeks ago we looked at assets in the money market compared to all the
index and sector funds. At the time, it showed a historic level of
That was the peak in the ratio, at 157%. It
currently resides at 73%, back to neutral territory (click
chart for larger view).
The S&P 500 futures have gone up, down, up, down,
all by more than 1%, over the past four days.
That's happened 7 other times. The next day
was up 2 times, down 5 times, with an average of -0.6%. There was no
particular bias after that.
Nothing really notable. We looked at
seasonality into year-end in a
Data Brief, which is positive, but other than that there isn't anything out
of the ordinary short-term.