Here is an updated picture of the Rydex Cash Flow ratio which is calculated by Decisionpoint.com (I think the 20 dollar per month subscription is worth it just for this ratio alone, and there is much, much more available from Decisionpoint.com !)
I last commented on the ratio here.
Yesterday the ratio reached the 1.08 level. This is the highest level reached in the past 5 years. According the the Rydex cash flow ratio, traders are more bearish than they have been at any time during the 2000-2002 bear market or during the subsequent bull market.
Now I think this is a bit of an exaggeration of the true state of affairs, but it is evidence that amateur short term market timers think much lower prices are likely in the stock market averages. This makes me even more bullish than I have been recently.
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