SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Tech Stock Options
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: ViperChick Secret Agent 006.9 who wrote (39653)4/15/1998 8:58:00 AM
From: Kevin  Read Replies (2) of 58727
 
>>> BUT if I am playing the SPX or something that is priced off the SPX...if it is weak it is weak...so if money is rotating out of heavily weighted sectors/stocks of the S&P.....it is going to make a difference until the money either comes back into those heavily weighted stocks OR until more money comes into the less heavily weighted stocks to make up for it... <<<

Hi Lisa. This topic is a strong reason why I like watching block money flow for the SPX. It shows me if the market is really pulling money out or just rotating it to another sector. You'd be surprised the impact of moving money from one sector to another.

Example: if every transportation stock in the SPX doubled today, the SPX would only move 13 points higher.

It's true. And say the money came from the financial sector to accomplish this. The SPX would stay unchanged, since the overall market value stayed the same ($103 billion is just moving from one sector to another), the transportations would double (from 741.83 to 1483.66) and the financial sector would drop only 9 points from 140.63 to 131.60

So people in transportation calls would make a killing even though the overall index was unchanged. Scarey huh?
That's why I believe block MF needs to be monitored for a gauge of inflow / outflow of money. And as you know, I've been watching positive block MF in the SPX for awhile now.

Hope this helps illustrate the possible impact of sector rotation.
For free to share any questions / comments.

See ya!
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News