I use these sentiment charts to help set the asset allocation of my "explore portfolio."  Search my website with the above search box to find FREE articles where I have recent updates to these charts. Of course, when any of these charts indicate an important change, I update my newsletter subscribers first.

This Rydex Nova/Ursa Ratio chart is one of the Sentiment Charts I use to help set the asset allocation of my "explore portfolio."

Definition of Rydex Nova/Ursa Ratio:

Rydex refers to Rydex Distributors, LLC which is a company with "more than 140 mutual funds, separately managed accounts and exchange traded products" and "over $26 Billion" under management as of 7/31/2011.  

The Rydex Nova/Ursa Ratio is a ratio of the money invested in the "Nova" fund by those who are bullish divided by the money invested by those who are bearish in the "Ursa" fund.    [Ursa is a Latin word, meaning bear.]

The funds used are much more expensive to buy than buying SPY when you are bullish then shorting SPY when you are bearish but many accounts, like IRAs, don't allow investors to short stocks or ETFs or trade frequently.  Thus, Rydex allows mutual fund investors to do so.  (Warning: I do NOT recommend this strategy as the expenses over the long term are a huge drag few ever overcome with market timing.)

Rydex Nova fund, ticker RYNVX, is an exchange traded fund (ETF) that "Seeks to provide investment returns that correspond to 150% of the daily performance of the S&P 500® Index."  Its gross expense ratio is 1.28%.  Investors buy this fund that uses leverage when they are bullish.

Rydex Ursa (bear) fund, ticker RYNVX, is an exchange traded fund (ETF) that "Seeks to provide investment results that inversely correlate to daily performance of the S&P 500® Index.."  Its gross expense ratio is 1.43%.  Investors buy this fund when they are bearish.