IMX recorded its largest ever single-month increase in May
June 06, 2016 — OMAHA, Neb.–(BUSINESS WIRE)–TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (Nasdaq: AMTD), is today releasing the Investor Movement Index® reading for May 2016.
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 May 2016 Investor Movement Index for the four weeks ending May 27, 2016, reveals:
- Reading: 4.87 (compared to 4.41 in April)
- Trend direction: Positive
- Trend length: 2 months
- Score relative to historic ranges: Middle
The IMX recorded its largest ever single-month increase in May, growing 0.46 to 4.87.
TD Ameritrade clients were net buyers of equities in May which helped to increase the IMX. Because the IMX measures portfolio volatility relative to overall market volatility, rising volatility of some of the more widely held positions paired with relatively stable market conditions further increased the IMX.
Net buying in some of those same widely held names whose relative volatility rose also had a compounding effect on the IMX score, resulting in the largest increase in the score since reporting began.
“The difference between April and May shows the largest positive jump we’ve ever seen in the IMX since our reporting began in 2010,” said Nicole Sherrod, managing director of trading, TD Ameritrade. “This was spurred by a rise in major indices and our clients taking advantage of price dips in popular stocks like Apple Inc. (AAPL) and Netflix.com Inc. (NFLX).”
Major equities move up
The major equity market indices each ended May above where they began, but only after slight declines during the month.
The S&P 500 and Russell 2000 were both up over 1.5% for the month, while the NASDAQ Composite increased more than 3%. The Dow Jones Industrial Average saw the smallest increase, closing just a half a percent higher than where it began in May. The release of the minutes from the Federal Reserve Board meeting in April seemed to cause some mixed reactions mid-month.
The equities market reacted in see-saw fashion and Treasury prices fell after the minutes seemed to indicate the Fed may be more open to raising their key rate than was previously thought. Fed futures markets seemed to change their expectations as well, with the CME’s FedWatch tool showing a nearly 25% probability of a rate increase in June – up from less than 6% a month ago.
Popular though beleaguered names emerged again
Well-known names that have seen recent price pressure were popular net buys in TD Ameritrade client accounts in May. Apple Inc. (AAPL) was a net buy for the period as the stock trended downward until mid-month following an unfavorable earnings announcement late last month.
Netflix.com Inc. (NFLX) was a net buy for TD Ameritrade clients during the period and also saw pressure until mid-month. Each company’s share price rebounded toward the end of the period. Starbucks Corp. (SBUX) saw some downward pressure in May and found more clients buying than selling. Facebook Inc. (FB), which has traded to new highs this year but was largely range bound during the month, was a net buy as well.
The May IMX period saw net selling in oil producers ExxonMobil Corp. (XOM) and Halliburton Company (HAL) as their prices continued to rally from year-to-date lows set at the beginning of the year. The companies were net buys during the end of 2015 and in the beginning of 2016 as the price of crude oil slumped below $40 a barrel. In the financial sector Bank of America Corp. (BAC) was net sold as its shares appeared to find a level of support during the month. Digital payments company PayPal Holdings Inc. (PYPL) was also net sold in May.
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 May 2016, 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 (Nasdaq: 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 40 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)