IMX Takes a Positive Turn in September Amid S&P 500 Pull Back
Renewed appetite for equities indicates investors were buying on market dips
October 07, 2014 – OMAHA, Neb.–(BUSINESS WIRE)–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 September 2014. 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 IMX has remained at high levels all year, but as the market has been in an uptrend this year, we’ve seen upticks during the market dips.”
The September 2014 Investor Movement Index for the four weeks ending September 26, 2014, reveals:
- Reading: 5.79 (compared to 5.68 in August)
- Trend direction: Positive
- Trend length: 1 month
- Score relative to historic ranges: High
During this same time period, the S&P 500 retreated from the record high it had reached during the previous month.
Clients taking a measured approach
“Our clients took a measured approach to increasing their market exposure in September and were very focused on specific names,” said JJ Kinahan, chief strategist for TD Ameritrade. “The IMX has remained at high levels all year, but as the market has been in an uptrend this year, we’ve seen upticks during the market dips.”
Although TD Ameritrade clients dialed back their equity exposure in August, they ramped it back up in September, sending the IMX to its third highest level since tracking of the index began. Along with mixed economic data, there were plenty of events for investors to consider, including: the possibility of Scotland leaving the United Kingdom; the European Central Bank announcement of a quantitative easing program; and Alibaba’s IPO, which was the largest in history. The equity markets saw volatility during the month, with the NASDAQ Composite starting September at its highest level ever, only to close the month 2% lower. The S&P 500 and the Dow Jones Industrial Average (DJIA) both reached new highs during the third week of the month but later retreated, with the DJIA finishing the month near where it started and the S&P 500 finishing one percent lower. Small caps stocks measured by the Russell 2000 had an even larger decline of five percent.
TD Ameritrade clients were net buyers overall in September. Apple (AAPL) and Yahoo (YHOO) were popular buys: Apple released its much-anticipated iPhone 6, while Yahoo was popular for its earlier, pre-IPO investment in Alibaba (BABA). Clients also bought BABA following its record-setting IPO. TD Ameritrade clients were net buyers of oil drillers SeaDrill (SDRL) and Transocean (RIG), which have been under pressure, as the price of crude oil traded at the low end of a 52-week range in September following its 52-week high set in June. Basic materials issuers Vale S.A. (VALE) and Kinder Morgan (KMI) were also popular buys.
TD Ameritrade clients also did some selling of popular names in September. Facebook (FB) reached a new high and was a popular sell, as was Intel (INTC), which reached a level it had not seen since shortly after the dot-com boom. TD Ameritrade clients were net sellers of Amazon (AMZN), which has been volatile in 2014 and trended lower in September, and the financial sector’s Citigroup (C) and Bank of America (BAC).
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of six 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.
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