ETF Flows Provide Early Indicator of Market Trends

Monitoring the flow of money into ETFs can provide an early indication of the next market trend.

That’s the conclusion of MarketWatch‘s John Spence in his blog post Greenlight’s Einhorn buying options on gold-miners ETF. Spence reports that hedge fund manager David Einhorn is buying call options on the Market Vectors Gold Miners ETF (GDX) in anticipation of future inflation caused by the Fed’s exploding balance sheet.

Spence also points out that record levels of investment are pouring into SPDR Gold Shares (GLD) and into oil funds. A popular oil ETF is the United States Oil Fund (USO).

For more, see the special report Investing in Oil with ETFs or the Commodities ETF Directory.

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