Nasdaq - Smells like a Bubble

From SentimenTrader

Rydex Nasdaq 100 Bull/Bear Ratio

Two weeks ago, we looked at asset levels in the Nasdaq 100 index funds at the Rydex mutual fund family.

At the time, traders had shunned technology stocks, so the Bull/Bear Ratio for the un-leveraged funds was near a two-year low.  The ratio for the leveraged funds was higher, but still only about average.

Over the past couple of days, and yesterday in particular, those traders fell in love with technology again (a clean breakout to new highs tends to do that).  They've once again jumped on the bandwagon, and aggressively so.

The chart above shows both ratios.  There is currently 46 times more money invested in the un-leveraged long fund than the un-leveraged inverse fund.  That's just a tad below the prior peak of 47 that we saw on February 8th.  It's a bit higher than the level reached on March 22nd and July 14th in the year 2000.

There is nearly 7 times more money invested in the leveraged long fund than the leveraged inverse fund.  That eclipses the highest ratios over the past few months, though it's still below the all-time peak from 2000.

This data had been more positive than negative for the market a couple of weeks ago.  That's no longer the case