Thanks MH for turning me on to Guy Lerner’s work, I’m enjoying it. Is he the same guy who contributes occasionally to Zerohedge?
I’m not sure, I haven’t been reading Zerohedge lately. However, he has been posting at Safehaven.com frequently. In a recent post, he cites a system based on Rydex traders alone. The system has generated 11 trades in the past decade — not enough data for statistical validation. The results he claims are eye-popping: ‘8 winners yielding 706 S&P500 points.’ These results are so good that I would have to test them myself, just to make sure they are not ‘too good to be true.’
But in any case, Rydex traders are radically overcommitted to the bullish side. A correction is needed to shake out the excessive bullishness and restore a healthy respect for risk, I would say.