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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gaj who wrote (21351)	7/28/1999 10:21:00 PM
From: pater tenebrarum	Respond to of 99985

bob, as it were, being added to the SPX has always an effect on a stock's price as the index funds are forced to buy it. btw, i suspect that the popularity of indexing is one of the reasons for the disturbing divergence of the a/d line, as index funds mindlessly buy the index components regardless of fundamentals. this does of course not guarantee great returns for the SPX stocks forever - should a bear market come, the index fund redemptions would turn the virtuous cycle into a vicious one, where mindless buying is replaced by equally mindless selling. hb