jbe; RE:" Diamonds, Spiders, Webs and Sector Indices "
well, no {grin} First of all, DIA is the DJIA-30 index in stock form... as SPY is the S&P-500 index, which can be bought and sold as a stock. The "WEBS", such as EWG is for Germany (there are 17 WEBS offered on the AMEX) are big, diversified funds of stocks from some foreign stock exchange, in dollar-values, which can be bought and sold as a common stock. You could buy some international fund if you wanted to... if the fund was large and diversified, it'll move in sync with the WEB.
By sector indices I mean "sectors of the market" such as OSX.X the Oil Service Sector Index ( "drillers" ) which is offered as an options vehicle by the Philadelphia Stock Exchange. Look here phlx.com for information about their sector indices, and look here phlx.com for a list of the "drillers" who make up this sector index. You can chart the OSX.X by typing in that symbol here quote.com and another handy reference for "driller freaques" is here tscn.com
You can buy options such as CALLs and PUTs on major market indices, such as the DJIA or the S&P-500 or S&P-100 (the OEX) and I usually buy options to trade the OSX.X "driller" index.
Looking up the sector indices on the WWWeb is fun to do and you will get a great feel for the market's structure by doing so. Here are some important sector indices that I follow...
DJX.X the DJIA-30 industrials
XOI.X and OIX.X the "BigOil" sector indices
OSX.X Oil Service Sector, itself consists of three flavours of underlying stocks: "Drillers", "Machinery & Equipment" and "Services"; (there is actually a fourth group in the OSX, "Transports" like OLOG).
CEX.X the big chemical companies
DRG.X the big drug companies
BTK.X the big biotechs
FPP.X Forest and Paper Products
BKX.X and BIX.X Banks
XBD.X Broker/Dealer sector index
...and so forth
The most important TechStock Sector Index is the SOX.X There is also a DDX.X DiskDrive index; internet index, Year2000 index, and so forth.
When beginning traders ask me for start-up help, I tell them to try to chart and trade SPY. If you can't figger out the market itself, you should probably be an investor rather than a trader.
I don't trade mutual funds; nor do I own any - so I cannot help you there - I'm sure there are lotsa folks who know all about that.
On Yahoo there is a chart generator that will compare any fund (or anything else, for that matter) to the simple S&P-500 (SPY). It is interesting to note how difficult it is to beat SPY - for any meaningful period of time.
For driller-freaques, I strongly urge you to look up the components of the OSX.X index, punch them into one of the on-line portfolio thingys, such as MyYahoo! or MSN or something, and follow the index that way. I use quote.com as my chart generator during the day because it does indices real-time for free, and because it does candlesticks, which are way-cool. You can follow the drillers intra-day by punching in OSX.X,3 which will give you 3-minute candlesticks. Not real-time, but also useful, is to punch in CL98N or CL98Z - the current symbols for crude oil futures on the CME. The OSX is influenced by the price of oil. There is some credence to trading XAL.X and PLN.X - the airline sector indices, counter-to the price of oil. Airlines like cheap oil, drillers do not.
Enough fer now - gotta get some sleep - it's another blue-sky spring-day morning in Paris (^_^)
-Steve |
