All about Indexs HUI, XAU, Gold, and more!

From time to time, one may hear of analysts and brokers discussions regarding indexes breaking the support and price levels fluctuations. What exactly does this mean and how does it affect the average investor?

Due to the sheer volume of stocks trading on an exchange, an analyst or broker cannot be realistically be expected to follow 100+ different stocks to get an idea of how the market is doing.

As we discussed, companies vary in size depending on shares issued and of course - their total market cap. In certain indexes - such as the S&P 500, the index is essentially a collection of the biggest companies trading on the index.

The S&P 500 is a stock market index containing the stocks of 500 Large-Cap corporations, most of which are American. The index is the most notable of the many indices owned and maintained by Standard & Poor's, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 companies that have their common stock included in the index.

The S&P 500 index forms part of the broader S&P 1500 and S&P Global 1200 stock market indices.

All of the stocks in the index are those of large publicly held companies and trade on the two largest US stock markets, the New York Stock Exchange and Nasdaq. After the Dow Jones Industrial Average, the S&P 500 is the most widely watched index of large-cap US stocks. It is considered to be a bellwether for the US economy and is a component of the Index of Leading Indicators. It is often quoted using the symbol SPX or INX, and may be prefixed with a caret (^) or with a dollar sign ($).

Likewise then, for Gold there is the HUI and XAU, both of which see plent of action day in and day out. HUI refers to AMEX's Gold BUGS Index and it's comprised of 15 largest "unhedged" gold mining stocks. The stocks are equal-dollar weighted - which means the largest stocks will carry more weight on the index price than smallest.

Take a look below for a sample HUI index from a few years back - Kinross, Newmont, and GoldCorp are all included as part of that list - if you recall these are companies in the $20B (yes that's billions market cap). Much like peope use NASDAQ or DOW Jones Industrial to measure how the overall sector is performing, HUI and XAU have their uses.

Company	Symbol	% of Index
Newmont Mining	NEM	16.1%
Gold Fields	GFI	15.9%
Freeport McMoran	FCX	10.3%
Iamgoldcorp	IAG	5.5%
Meridian Gold	MDG	5.5%
Harmony Gold Mining	HMY	5.3%
Goldcorp	GG	5.2%
Randgold Resources	GOLD	5.1%
Agnico Eagle Mines	AEM	4.9%
Kinross Gold	KGC	4.8%
Glamis Gold	GLG	4.7%
Hecla Mining	HL	4.4%
Eldorado Gold	EGO	4.3%
Golden Star Resources	GSS	4.0%
Coeur D'Alene Mines	CDE	4.0%