For a second month, volatility in the overall market outpaced the volatility of many of the widely held positions in TD Ameritrade client accounts

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 February 2016. 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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TD Ameritrade's Investor Movement Index (IMX) vs. S&P 500 (Graphic: TD Ameritrade)

The February 2016 Investor Movement Index for the four weeks ending February 26, 2016, reveals:

  • Reading: 4.44 (compared to 4.52 in January)
  • Trend direction: Negative
  • Trend length: 2 months
  • Score relative to historic ranges: Middle

TD Ameritrade clients had slightly less exposure to the equity market in February, as the IMX decreased to 4.44.

For a second month, volatility in the overall market outpaced the volatility of many of the widely held positions in TD Ameritrade client accounts. The relative stability of these positions, coupled with net buying in some other names whose volatility was less than that of the overall market, helped to lower the IMX reading.

“We saw our clients use market movements to rotate out of stocks they had purchased over the past few months and rallied, into names that had dropped and they expected to perform well,” said JJ Kinahan, chief market strategist, TD Ameritrade. “Our clients’ activity with AT&T Inc. (T) is a good example of that. We’ve seen clients as net buyers of AT&T for the last couple of months. After its earnings announcement in late January the stock price climbed to a multi-year high and our clients were net sellers.”

The February IMX period saw the major equity market indices take a brief dip mid-month, with the Russell 2000, Nasdaq Composite, and S&P 500 closing at their lowest points in a year. However, markets rose in the second half of the month, and each of the indices ended the month slightly above or very near where they began. The Dow Jones Industrial Average was the biggest winner, gaining around 1%, while the S&P 500 and the Russell 2000 were essentially flat at month end. The NASDAQ Composite had lost about half of a percentage point at the close of the February IMX period. The markets’ foray into negative territory raised volatility and the VIX, a measure of volatility in the S&P 500, closed above 28 in mid-February—something it hadn’t done since September. As the markets rebounded, the VIX settled lower, closing near 19 which was the lowest close since the year began. The price of crude oil was also volatile in February, and eventually declined to around $26, its lowest point in more than a decade. Prices later rebounded to close the period around $34.

Several popular stocks seemed to find levels of support in February. TD Ameritrade clients were net buyers of Alphabet Inc. (GOOG and GOOGL), which saw a sharp decline from their record high at the beginning of February following their earnings release. Alphabet’s stock price fell back to the level it saw prior to their previous earnings release in October, but eventually climbed higher during the second half of the month. Apple Inc. (AAPL) was another net buy whose stock price has been under pressure but seemed to stabilize in February. Walt Disney Co. (DIS) was a net buy up to and following its February earnings release. The stock trended downward to start the month, but ended the February IMX period about 7% higher than where it had closed after announcing its quarterly results. Online retailer Amazon.com Inc. (AMZN) posted record profits in its earnings announcement late last month but missed analyst estimates. The stock saw price pressure up through the middle of the February IMX period but later rebounded and was a net buy.

Dividend payers in the technology sector AT&T (T), Verizon Communications (VZ), and Oracle Corp. (ORCL) were each net sold in February. All three stocks saw gains in February, with AT&T and Verizon Communications setting new 52-week highs. Michael Kors Holdings (KORS), which has increased since its earnings announcement early in the month, was net sold as well. Brick and mortar retailers Target Corp. (TGT), Wal-Mart Stores (WMT), and Macy’s Inc. (M) were also net sold in February. Each saw its price trend upward during the month.

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 2016, 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. 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)

TD Ameritrade Holding CorporationFor Media:Beth Evegan, 201-369-5930Communications & Public Affairsbeth.evegan@tdameritrade.com@TDAmeritradePRorFor Investors:Jeff Goeser, 402-597-8464Investor Relations & Financejeffrey.goeser@tdameritrade.com

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