Trade the Cycles

Wednesday, December 21, 2005

.................SPX Takes a Dive And So Do Gold/Silver Stocks

Now, after early strength the S & P 500 (SPX) is taking a dive and therefore SPX index funds are selling NEM and other index funds are selling the gold/silver stocks in their respective indices. So, early SPX strength led to gold/silver stock strength and now SPX weakness is resulting in gold/silver stock weakness. As I watch NEM versus SPX and SPY (an SPX ETF which is an index fund that's traded like a stock) in my streamer the affect of index fund buying or selling is nearly instantaneous or seems to be at least. The point is that there's not much lag time after SPX takes a dive (or rallies) that gold/silver stocks do because index funds are selling (or buying) them. Ciao

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