Institutional Investors An Critically Important Indicator?

By: Marty_Chenard

For years, we have pointed out that Institutional Investors pretty much ruled the markets because they were responsible for 50% to 70%+ of the volume in any given day.

For that reason, watching how much they buy and how much they sell everyday is critical. Buying when Institutions are selling is foolhardy, and so is selling when Institutional investors are buying.

Today's chart is shown as a courtesy to our free members and it can be seen everyday on our paid site by going to Section 4, Chart 6.

Today's chart goes back to last December and shows when Institutions were in Accumulation and when they were in Distribution. (They were in Accumulation when the blue line was above the red, and in Distribution when the red line was (is) above the blue.) Do note what happened to the NYA Index when these shifts occurred.

The vertical lines show when each cross-over shift occurred. What is important to note, are the times when the two lines started to converge. That is the early warning sign that Institutional Investors will shift direction. If you wait until the actual cross-over day, the market has usually figured it out on that day with the market having a spike up or down.

What is this chart saying now?

It is saying that Institutions are in Distribution.

It is also saying that the Institutional Buying and Selling has started to show signs of converging because the Institutional buying broke above a resistance and it made a higher/high. At the same time, the Institutional selling is still in an up trend, and it has not made a higher/high yet. So, Institutions are showing signs of abating on their level of Distribution.

Bottom line: Institutional Distribution levels are decreasing. If they converge more, with Institutional selling dropping below the 9000 level, then the market's bias will start shifting to short term positive.

** 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.

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