– Glossary
Rydex Nova/Ursa Ratio
The Rydex family of mutual funds offers the bullish Nova fund (which targets 1.5 times the performance of S&P 500 Index) and the bearish Ursa fund (which moves inverse to the S&P 500 Index). A ratio of the assets in these funds provides an indication of sentiment toward the broader market. More dollars pouring into the Ursa fund relative to the Nova fund results in a lower ratio that suggests pessimism (and a potential market bottom). Relatively more dollars going into the Nova fund (i.e., a higher ratio) will signal a possible market correction or consolidation, as buying power is close to being exhausted.
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