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I am aware of the phenomenon. What I am hoping for is some fundamental insight as to *why* the two markets behave that way. Being an option trader, measuring correlations is part of my routine. And the said correlation has been unusually strong lately, in several time frames.
Although I never trade on fundamentals alone, I would still be interested in the economical basis for this occurrence, and would be grateful if someone could come up with a fundamentally-oriented explanation.
Best regards,
Michael Suesserott
Ron Cernokus wrote:
> These two markets often turn together. Look at March, April and may.
>
>
> ----- Original Message -----
> *From:* Michael S. <mailto:MikeSuesserott@xxxxxxxxxxx>
> *To:* realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
> *Sent:* Tuesday, May 31, 2005 4:13 PM
> *Subject:* [RT] Parallel moves
>
> For some time now, SPY and XLE (Energy Select Spyder)have been
> moving in tandem, even on 5min. charts. Any ideas as to the
> fundamental reason behind this phenomenon? Shouldn't these markets
> be inversely correlated, if at all? I.e., shouldn't stocks go down
> when energy becomes more expensive?
>
> Best regards,
> Michael suesserott
>
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