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IPFS News Link • Economy - Economics USA

"All-In!"

• https://www.zerohedge.com, by Sven Henrich

One indicator combination of interest, RYDEX account positioning as well as money flows. During times of market stress we can observe shifts to more bearish positioning and the RYDEX ratio moves higher, this last observed in larger size in 2015/2016. But the times of stress or fear are apparently over. Even last December's 20% drubbing produced a much lesser spike during a big correction than ever before.

Indeed December's 20% drop produced barely a blip. The reason? One can only speculate of course, but I suspect the massive switch to passive investing has a lot to do with it. Corrections don't last anymore, that is been the investor lesson over the past 10 years. There is no reason to fear any longer.

Central banks always step in and after a few days the correction low is made. And investors have been right to take on that attitude. So far.

Indeed we saw the government step in with liquidity calls during Christmas and the Fed switching policy leading to the expected rate cut this week. The end result: A 0.04 ratio on RYDEX, indicating fully long account positioning.


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