OMAHA, Neb.--(BUSINESS WIRE)--TD Ameritrade1 has released the Investor Movement Index® reading for August 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 August 2015 Investor Movement Index for the four weeks ending August 28, 2015, reveals:
- Reading: 5.24 (compared to 5.39 in July)
- Trend direction: Negative
- Trend length: 1 month
- Score relative to historic ranges: Moderately High
The IMX dropped 2.78 percent to 5.24 in August as retail investors slightly decreased their exposure to the U.S. equity markets. Overall, investors were net buyers, finding opportunities in names that were less volatile despite the late month market shake-up. In addition, many of the widely held positions in TD Ameritrade client accounts were lower BETA equities than the market in general. They adjusted their exposure to volatility as a whole, at the same time participating in the post sell off bounce.
By the middle of 2015 the IMX had seen several increases, as equity market volatility had reduced to near historical levels while the market continued its upward trend. But August saw a slight reversal in the reading as clients managed risk by finding some havens in positions less volatile than the broader markets.
“Volatility roared in at the end of the month, yet investors remained calm and looked for opportunities – strategically rotating some of their equity exposure to lower BETA and, in some cases, higher yield equities to account for market fluctuation,” said Nicole Sherrod, managing director of trading for TD Ameritrade.
Concerns of a global economic slowdown, a devaluation of the Chinese Yuan and speculation around the Federal Reserve rate hike contributed to declines in all of the major equity market indexes. Sherrod added, “For months the VIX has been at relatively low levels, so when things got rocky in the equity markets – our clients maintained composure, managed their risk and quickly bought into dips in the market.”
Twitter Inc. (TWTR) traded down to near its IPO price of $26 per share and was a net buy. Walt Disney Co. (DIS) was also a net buy after it dipped below its 50-day moving average following a mixed earnings report that included lower future subscriber expectations and warnings of foreign currency valuations affecting future profits. Netflix.com Inc. (NFLX), whose stock price had declined over 20 percent in August and then regained some of its value near the end of the month, was also a popular net buy. AT&T Inc. (T), which had traded lower since approaching its 52-week high in June, was a net buy. Additional popular names bought included Freeport-McMoran Inc. (FCX) and Exxon Mobil Corp. (XOM).
Even with the markets under pressure, TD Ameritrade clients appeared to find some key names to take profits in. Sirius XM Holdings Inc. (SIRI) was a net sell as it appeared to reach a key level of resistance around $4 per share. Citigroup Inc. (C) hit a new 52-week high in July and maintained itself near that level into August; TD Ameritrade clients were net sellers. McDonald’s Corp. (MCD) and Delta Air Lines Inc. (DAL), both of which have been range bound in 2015, were also net sells. McDonald’s had reached the high end of its range in mid-August. Additional popular names sold included Yahoo Inc. (YHOO) and Alcatel-Lucent (ALU).
During the August IMX period the Russell 2000, Dow Jones Industrial Average and NASDAQ Composite were all off around 6 percent, while the S&P 500 fared the best with a 5.5 percent decline. Volatility of the S&P 500 as measured by the VIX was within its historical norms for the first three weeks of the month but began to rise at the end of the third week and closed above 40 to begin the fourth week, something it hadn’t done since November 2011.
About the IMX
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 August 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.
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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.
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 2016 U.S. Olympic and Paralympic Teams, as well as an official sponsor of the National Football League for the 2014, 2015 and 2016 seasons, 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.
1TD Ameritrade, Inc. (“TD Ameritrade”) is a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD)
Source: TD Ameritrade Holding Corporation