TD Ameritrade January 2018 Investor Movement Index (Graphic: TD Ameritrade)

The January 2018 Investor Movement Index ® broke its upward momentum by dropping more than nine percent to 7.79, TD Ameritrade, Inc. ("TD Ameritrade"), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (Nasdaq: AMTD) announced today. 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.

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TD Ameritrade January 2018 Investor Movement Index (Graphic: TD Ameritrade)

TD Ameritrade January 2018 Investor Movement Index (Graphic: TD Ameritrade)

January IMX

The January 2018 Investor Movement Index for the four weeks ending January 26, 2018, reveals:
  • Reading: 7.79 (compared to 8.59 in December)
  • Trend direction: Negative
  • Trend length: 1 month
  • Score relative to historic ranges: High

With the largest month-over-month decrease in three years, January's IMX dropped 9.3 percent, down from the prior month's record high. TD Ameritrade clients were net buyers overall as the market continued to rally in January, with the S&P 500 and Dow Jones Industrial Average both reaching new milestones. Despite net buying activity, exposure to equity markets within client accounts declined during the period. The reduced exposure was driven by lower relative volatility among widely held names, including General Electric Inc. (GE), Apple (AAPL) and Amazon Inc. (AMZN).

Despite a decline in January's IMX, market indices continued to soar. The Dow Jones Industrial Average reached its next 1,000 point mark in record-setting time, the Nasdaq Composite closed at an inflation-adjusted record during the month, and the S&P 500 increased over 300 percent since the bull market began in March 2009.

"At the start of 2018, clients may have realized some profits in stocks that had stronger moves relative to the overall market," said JJ Kinahan, chief market strategist at TD Ameritrade. "As they began to look for opportunities elsewhere, we saw clients start to rotate into stocks with lower exposure to moves in the overall market."

Net buying activity favored the Technology and Industrial sectors, as Facebook Inc. (FB), Amazon Inc. (AMZN) and General Electric Inc. (GE) were net buys during the period. Facebook Inc. (FB) and Amazon Inc. (AMZN) reached all-time highs in January, while General Electric Inc. (GE) increased early on in the period then sold off after the company missed earnings estimates. Boeing Co. (BA) - up nearly 100 percent over the last year following strong demand in the Asia-Pacific market - reached all-time highs and was net bought. Caterpillar Inc. (CAT) was net bought as well.

Additional popular names bought include Bank of America Corp. (BAC), Microsoft Corp. (MSFT), and Berkshire Hathaway Inc. (BRK.B).

Following market gains, TD Ameritrade clients appeared to take profits in some names during the period. Healthcare players Gilead Sciences Inc. (GILD) and Teva Pharmaceuticals (TEVA) were net sold. Gilead Sciences Inc. (GILD) received multiple analyst upgrades and traded near 52-week highs during the period, while Teva Pharmaceuticals (TEVA) traded at levels not seen since last summer after its cost-cutting plan resulted in an analyst upgrade. Energy stock, Conoco Phillips (COP), was net sold as crude oil traded near a 3-year high and U.S. rig counts reached the highest point since September. Finally, Arconic Inc. (ARNC) traded at an 11-month high following freezes to its pension plan, and was net sold.

Additional names sold include Macy's Inc. (M), Qualcomm Inc. (QCOM), Sirius XM Holdings Inc. (SIRI), and Chipotle Mexican Grill (CMG).

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 7 million funded accounts, which 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 2017; 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 CorporationMillions 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. 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).

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