Market timers are extremely active

Market timers in the Rydex family of mutual funds are the most active since early-2019. Our Rydex Sector Breadth indicator, which looks at how many Rydex funds have assets greater than the average over the past 50 days, is at its highest level since the stock market's initial rally off of December 2018 lows:

Such high Rydex sector breadth readings usually led to worse than average forward returns on all time frames.

This was especially bearish for stocks if we consider the market environment we're currently in (i.e. still primarily a long term downtrend):

Cases that occurred when the S&P 500 was below its 200 dma almost universally led to losses for the S&P in the weeks and months ahead: