TD Ameritrade's Investor Movement Index: Clients Were Net Buyers of Equities in December

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 December 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.

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The December 2015 Investor Movement Index for the four weeks ending December 24, 2015, reveals:

• Reading: 4.92 (compared to 4.88 in November)
• Trend direction: Positive
• Trend length: 3 months
• Score relative to historic ranges: Moderately high

Net buying in December helped to increase the IMX slightly, to 4.92.

This December’s IMX reading is only slightly higher than November’s reading. Net buying in TD Ameritrade client accounts contributed to an increase in exposure to the equity market and, in turn, an increase to the IMX. However, a reduction in volatility relative to the overall market in some widely held positions—like General Electric Co. (GE), Microsoft Corp. (MSFT), and Bank of America Corp. (BAC)—held the increase to a modest level.

The December IMX period ended with the major market indices having lost ground from where they started. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite were all off around 1.5%, while the Russell 2000 was down nearly 4%. Volatility in the S&P 500 as measured by the VIX increased ahead of the highly anticipated Federal Reserve Board meeting and press conference. The Fed voted to raise its key interest rate by 0.25%, the first increase in this rate since 2006, and stated that any additional increases would be dependent upon economic conditions relative to its objectives of maximum employment and 2 percent inflation.

As 2015 drew to a close, only the NASDAQ Composite recorded any meaningful gain. The technology-weighted index is up more than 6% compared to where it ended last year. The S&P 500 is essentially flat, having lost 0.1%, and the DJIA and Russell 2000 have actually recorded losses—1.5% and 4.1%, respectively—since December 31, 2014. During this same period we have seen the IMX range between 4.63 and 5.39. The IMX closed out 2015 at a moderately high level of 4.92, but lower than the reading of 5.12 we saw last December.

“Clients focused on the effect of the Fed raising rates for the first time since the financial crisis as well as the effects of the holiday season on retail,” said JJ Kinahan, chief market strategist, TD Ameritrade. “They also spent time reallocating their portfolios and taking profits from winners and allocating to those stocks that would benefit from shopping as well as the higher interest rate environments. In closing out 2015, investors remained bullish overall, although they were slightly less exposed to the market than the same time last year.”

TD Ameritrade clients seemed to find buying opportunities in companies they thought might do well during the holiday shopping season, as Apple Inc. (AAPL) and FitBit Inc. (FIT) were both net buys. Both companies also rebounded off levels of support during the December IMX period. The Walt Disney Co. (DIS) was another net buy as it prepared to release its first Star Wars film since acquiring the franchise in 2012. Facebook Inc. (FB), which has been range bound since gapping up in price following a favorable earnings announcement, was also a popular net buy.

Profit taking appeared to be on the minds of TD Ameritrade clients, as both Netflix Inc. (NFLX) and McDonald’s Corp. (MCD) were net sells. Each hit a new high to during the December IMX period. Alibaba Holdings Group Ltd. (BABA) and The Coca-Cola Co. (KO), both of which have rebounded since hitting lows in September, were net sold as well. Some technology names making news also seemed to be popular net sells. Yahoo! Inc. (YHOO), whose board voted in favor of spinning off part of its web business, was net sold. Intel Corp. (INTC) was also net sold as it announced the closing of an acquisition of chip making rival Altera Corp.

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 December 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 (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.

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