Rydex Bear/Bull ratio has turned at 0.68 and is now 0.81. Have we had significant sell-off following a turn at 0.68? Yes,as it happens to be our last turn point in January 2003. Scanning the charts we appear in a corrective sell-off and then rally as bear capitulation just not at levels that indicate a destructive sell-off. I am sorry but i can't share these charts, they are via DecisionPoint, and are in their proprietary sector.
I believe the drop in March 2000 was made extreme by the program trading and chart chasers. Once the extreme rising support broke and was back-tested, there was really nothing but air below. The selling and smart money pulling out just fed on itself, IMO.
I don't recall any house suggesting equity allocations below 50% since the bubble burst.
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