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During countertrend rallies a “basic Instinct game plan” if aggressive is to look to score on defense when up against key falling resistance, with a stop above the resistance line. IYM looks to have hit key resistance and is breaking support.
Thanks for that insight Chris!
Bill and Mike….sentiment question/discussion. I like the polls, yet they can change quickly. My favorite is the cash to stock ratio of the Rydex funds.
Polls reflect “opinions” the Rydex ratio reflects “action” already taken. Its one thing for people to say, “I am bullish or bearish” its another thing per making a move of selling stocks/equities and moving to cash!
What I found intersting was that even though the markets hit a low on 8/9 and retested it a few times, it wasn’t until right around 10/4 did investors bail from the stock market and raise a ton of cash at the Rydex complex! The ratio as of 10/4, reflectd that the crowded trade at Rydex was “in cash” and that the markets were due a rally, that should surprise many investors.
Over the last 15 years, when the Rydex cash ratio was high, it reflected an “overly bearish” situation and markets moved up more than most expected, for sure at the Rydex complex….
Chris
Chris,
On 10/13 in the comments you mentioned the following:
“I will share in a couple of days one of the best sentiment indicators I have enjoyed using since the late 1990′s. I shared this on 10/4 with members and boy have the markets shifted since then…again this isn’t a poll, its a reflection of “action taken” by investors.”
I have been eagerly awaiting the follow up ever since. Any chance you would be willing to divulge this sentiment indicator yet?