TD Ameritrade's IMX Vs. S&P 500 (Graphic: Business Wire)

TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE:AMTD), is today revealing the Investor Movement Index ® reading for February 2014. The Investor Movement Index, or the IMX sm, 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 February 2014 Investor Movement Index for the four weeks ending February 28, 2014, reveals:
  • Reading: 5.74 (compared to 5.66 in January)
  • Trend direction: Positive
  • Trend length: 5 months
  • Score relative to historic ranges: High

February’s IMX reading rose for the fifth consecutive month and above the previous record high of 5.66 set in January 2014. TD Ameritrade clients were well positioned for the rally in February as they built up market exposure in January when the S&P 500 declined. The IMX has increased for five consecutive months, which is the longest upward trend in nearly two years. Since tracking of the IMX began in January 2010, the longest run of consecutive increases was the six months ending in March 2011. Net buying activity in individual equities was concentrated in technology and mixed across other sectors. Clients appeared to be focused on stock-picking strategies, as net buying activity in U.S. ETFs and mutual funds was lower than in previous months. International stock mutual funds and ETFs were net sold amidst economic concerns in emerging markets.

Net buying activity within the technology sector favored Google (GOOG), AT&T (T), Twitter (TWTR), and Verizon (VZ). TD Ameritrade clients appeared to treat volatility in widely held names – including General Electric (GE), Amazon (AMZN), and Coca Cola (KO) – as an opportunity to build up positions. Net buying activity also favored Chevron (CVX), Kinder Morgan (KMP), and Sea Drill (SDRL); each of these energy-related companies were trading at multi-month lows. While clients were net buyers overall in the technology sector, they were net sellers of some widely held names: Nokia (NOK), Alcatel (ALU), Cisco (CSCO), and Yahoo (YHOO). Caterpillar (CAT) and Green Mountain Coffee Roasters (GMCR) both saw new highs in February, which clients seemed to view as an opportunity to sell. Clients also lightened positions in Apple (AAPL), which recently bounced higher off of a multi-month low.

“We’ve seen our clients continue to rotate into sectors that were underperforming relative to the S&P 500 in anticipation of their performance improving,” said JJ Kinahan, chief strategist, TD Ameritrade. “Volatility has become a time of opportunity rather than panic.”

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 February 2014, 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.

About TD Ameritrade Holding CorporationMillions 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 37 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)/NFA ( www.nfa.futures.org)

Copyright Business Wire 2010

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