Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Will Institutional Investors Start Selliing Stocks ???

Stock-Markets / US Stock Markets Jun 22, 2009 - 03:21 PM GMT

By: Marty_Chenard

Stock-Markets

Best Financial Markets Analysis ArticleWe often discuss the NYA Index because that is where the big Institutional Investors do most of their trading due to the volume of their transactions.


But, my favorite index measurement goes to the heart of what Institutional Investors are really doing. For those who know about Pareto's Principle, it makes a lot of sense. (For those unfamiliar with Pareto's Principle, here is an explanatory link: http://en.wikipedia.org/wiki/Pareto_principle)

Pareto's Principle therefore suggests that 20% of Institutional stock holdings would represent 80% of their invested dollars. (The actual percentages are closer to 30% and 70% right now.)

Since Institutional Investors represent over 50% of any given day's trading volume, they are a key controlling element in the stock market. It never pays to go against what Institutional Investors are doing. If they are selling and you are buying or holding, you will get hurt. If they are buying and you are selling, you will miss a rally.

So, that is why we monitor the top investments held by Institutional Investors.

Because it is not really an index like the S&P or the Dow, it can't be manipulated of played with. You can't invest in it, there is no ETF for it, and there are no options for it.

It changes according to how Institutional Investors redistribute their assets among different stocks during different market cycles. From a technical analysis standpoint, it behaves the way indexes used to decades ago without the hedging and stop running that often goes on. In fact, the top of the recent Bull Market was signaled after the Institutional "core holdings" index hit a perfect 61.8% Fibonacci Retracement.

For our paid subscribers, today's update will not be anything new, since they see an update of our Institutional data every morning. So, today's Institutional Index update is a courtesy update for our visiting free members.

Below is a 2005-2009 chart of the Institutional "core holdings". The data for 2009 clearly shows how the index bottomed and has been having a nice rally ... just like the other indexes.

What is going on now, is what is important.

If you take a moment to look at the lower left hand corner of the chart, you will see a close up of the current rally's movement.

If you look closely, you will see a light blue support line for this rally. It has 5 touch points, points where the index held and then proceeded to move higher from there. None of the touch points violated the support line ... except for the current one which briefly slipped below the support line and then rebounded last Friday by closing slightly above it.

Here is what it means: It means that the brief support line breach is a caution notice for investors. It means that the Institutional Index is once again "testing the rally's support line".

It also means that the current rally did not signal a new Bull Market yet. Why? Because the current rally's up move has not yet made a "higher/high" over the previous high ... so technically, this is still part of a longer term down trend.

What is important now, is for the Institutional Index to hold its current support line. If it doesn't, that would open up the possibility for the index to move into a correction modality, taking the other indexes down with it.

     ________________________________________________

*** Feel free to share this page with others by using the "Send this Page to a Friend" link below.

Send This Page To a Friend

By Marty Chenard
http://www.stocktiming.com/

Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages . I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information

Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools.  As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL.  He is an advanced technical analyst and not an investment advisor, nor a securities broker.

Marty Chenard Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in