TD Ameritrade’s Investor Movement Index: New Two-Year Low Marks Fifth Month of Decline in Seven Months

After a Moderate Increase in Equity Exposure in March, Net Selling in April Contributes to the New Low

TD Ameritrade's Investor Movement Index (IMX) vs. S&P 500 (Graphic: TD Ameritrade)

OMAHA, Neb.--()--TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD), is today releasing the Investor Movement Index® reading for April 2015. The Investor Movement Index, or the IMXsm, is a proprietary, behavior-based index created by TD Ameritrade that aggregates Main Street investor positions and activity to measure what investors are actually doing and how they are positioned in the markets.

The April 2015 Investor Movement Index for the four weeks ending March 27, 2015, reveals:

  • Reading: 4.63 (compared to 4.75 in March)
  • Trend direction: Negative
  • Trend length: 1 month
  • Score relative to historic ranges: Middle

The IMX dipped to a new two-year low of 4.63 in April as TD Ameritrade clients lowered their exposure to U.S. equity markets.

This marks the fifth time in the past seven months that the IMX has declined, a period in which the major indexes have been somewhat range-bound and the S&P 500 has seemed to encounter resistance at the 2100 point level. Net selling by TD Ameritrade clients in April contributed to their reduced exposure to equities. Earnings announcements from some popular holdings seemed to offer an opportunity for TD Ameritrade clients to take profits and sell positions they had built up in the previous months. As we have seen in prior months, many popular issuers saw their volatility relative to the overall market decline, which lowered equity market exposure in TD Ameritrade client portfolios and drove the IMX reading lower.

The major U.S. equity market indexes saw gains during April. The Russell 2000, Dow Jones Industrial Average, and S&P 500 each saw greater than 2% increases, while the NASDAQ Composite increased 4.1% and registered a new record close to end the April IMX period. Some positive earnings announcements and reduced fears of a June interest rate hike by the Federal Reserve seem to help push the markets upward. Volatility in the S&P 500 as measured by the VIX reached a year-to-date low during the period as well, and Treasury yields also trended downward for the month.

“This shows the continuing sophistication of the retail investor as the market hits all-time highs they’ve used it as an opportunity to sell stocks they’ve accumulated in previous months,” said JJ Kinahan, chief strategist, TD Ameritrade. “Our clients’ buying activity has been targeted towards stocks they feel are undervalued.”

Apple Inc. (AAPL) was a popular net buy ahead of its earnings announcement and as news of orders for its new watch product were reported. Starbucks Corp. (SBUX) and AT&T Inc. (T) were also net buys and reported earnings during the period; both stocks jumped higher following earnings. Dividend-paying issuers like Walt Disney Co. (DIS), Alcoa Inc. (AA), and Visa Inc. (V) were also popular buys. Buying activity also favored Berkshire Hathaway Inc. (BRKB) in advance of their annual shareholders meeting. The stock has been under pressure and has trended lower since the beginning of the year.

April saw broad net selling, but there were some trends to be found. Names in the news like JC Penney Co. (JCP) and Alcatel-Lucent (ALU) were popular sells. JC Penney provided unexpected but favorable sales figures, and Alcatel-Lucent announced a merger with rival Nokia Corp. (NOK). Yahoo Inc. (YHOO) and Sirius XM Holdings Inc. (SIRI), which have both traded in relatively tight ranges since the beginning of the year, were both net sells as well. General Electric Co. (GE), which is one of the most widely held securities by TD Ameritrade clients, was also a net sell in April.

The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of 6 million funded accounts that includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX.

For more information on the Investor Movement Index, including historical IMX data going back to December 2010, to view the full report from April 2015, or to sign up for future IMX news alerts, please visit www.tdameritrade.com/IMX. Additionally, TD Ameritrade clients can chart the IMX using the symbol $IMX in either the thinkorswim or TD Ameritrade Mobile Trader platforms.

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.

Past performance of a security, strategy or index is no guarantee of future results or investment success.

Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.

The IMX is not a tradable index. The IMX should not be used as an indicator or predictor of future client trading volume or financial performance for TD Ameritrade.

For the latest TD Ameritrade news and information, follow the Company on Twitter, @TDAmeritradePR.

Source: TD Ameritrade Holding Corporation

About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE:AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how — bringing Wall Street to Main Street for more than 39 years. An official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information.

Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)/SIPC (www.SIPC.org)

Contacts

TD Ameritrade Holding Corporation
For Media:
Beth Evegan, 201-369-5930
Communications & Public Affairs
beth.evegan@tdameritrade.com
@TDAmeritradePR
or
For Investors:
Jeff Goeser, 402-597-8464
Investor Relations & Finance
jeffrey.goeser@tdameritrade.com

Contacts

TD Ameritrade Holding Corporation
For Media:
Beth Evegan, 201-369-5930
Communications & Public Affairs
beth.evegan@tdameritrade.com
@TDAmeritradePR
or
For Investors:
Jeff Goeser, 402-597-8464
Investor Relations & Finance
jeffrey.goeser@tdameritrade.com