On 10/13 I shared the chart below and ended with the message that the channel was about to end and that the majority should be surprised. (see post here)  Well who was the majority at the time?  Keep reading…


In the post I shared in the comments section  (see the last comment at the bottom of this link) that the “Crowded trade had become cash, according to the Rydex Ratio!”  This ratio reflected that a ton of investors had moved monies out of the stock market and moved into the safety of money markets.  Earlier this month, the Rydex ratio reached levels not seen many times over the past 15 years!!!

Below is the Rydex ratio, overlayed  with the 500 index and the VIX that I shared on 10/6 with premium members. 


As you can see from the chart above, the 500 index was at the channel lows, with the VIX at resistance highs and the Rydex ratio was above the 1.5 level, which has seldom taken place since the late 1990’s. As dark as things seemed to many at the time, this high of fear readings (VIX/Rydex ratio) were suggesting this was not a place to bet your life on lower prices!

I shared yesterday that Fib resistance looked to have been broken and was now being tested as support and the next big test following a Fib breakout is the underside of the neckline in the broad market, coming into play around the 1,270 level. (see post here) 

Wow has this move come quickly…we are almost there this morning!!!

On a personal note….Thank you for the overwhelmingly large response and kind words so many of you have expressed per the passing of my father.  I am deeply honored by your kind words and forever grateful!

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past