TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD), is today releasing the Investor Movement Index® reading for May 2015. 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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The May 2015 Investor Movement Index for the four weeks ending May 29, 2015, reveals:

  • Reading: 4.91 (compared to 4.63 in April)
  • Trend direction: Positive
  • Trend length: 1 month
  • Score relative to historic ranges: Middle

The IMX jumped higher to 4.91 in May while the S&P 500 slightly declined.

TD Ameritrade clients were net buyers of equities during the May IMX period, which helped drive the IMX to its third largest month-to-month percentage increase since tracking of the index began in December 2012. Net buying of equities was not the only factor in the increase, however, as some widely held positions saw increases in volatility relative to the overall market, which helped to further the increase in the IMX.

The month of May began with the S&P 500, Dow Jones Industrial Average, NASDAQ Composite, and Russell 2000 giving up some of the gains they saw in April. The S&P 500 and Dow Jones Industrial Average rallied mid-month to set new all-time highs in the fourth week. Both indexes declined during the fifth week and ended the period near where they began. The NASDAQ Composite, which carried its new all-time high into the May IMX period, also traded downward through the third week of the month and rallied into the fourth week. It also finished the month very near where it began. Despite the dips in the U.S. equity market indexes during the beginning of the month, volatility in the S&P 500, as measured by the VIX, traded below 12 for the first time since early December 2014, and set a new year-to-date low for the second month in a row. Unemployment numbers—which have been noted as a key indicator of economic health by the Federal Reserve, and which they have hinted will play into their decision to raise rates—remained unchanged in April at 5.4% and non-farm payrolls for March were revised down. These numbers seemed to further reduce investor’s concerns of a near-term interest rate hike. In contrast to the U.S. equity market indexes, the 10-Year Treasury rate trended upward for the first three weeks of May, and declined only slightly to finish the month above where it began.

“Over the past six months, retail investors had been reducing overall equity market exposure in the form of profit taking as the markets pushed to higher highs,” said Nicole Sherrod, managing director of trading, TD Ameritrade. “May presented a buying opportunity as many stocks retail has favored in the past dropped to more appealing entry levels. This helped drive the IMX to its third largest month over month percentage increase in over 2 years.”

Popular social media stock Twitter Inc. (TWTR) —which lost nearly a quarter of its value when disappointing earnings were leaked before market close, and then saw its volatility relative to the overall market increase—was a net buy in May as TD Ameritrade clients appeared to see opportunity at the new, lower price. LinkedIn Corp. (LNKD) was another social media name that also saw a steep decline surrounding its earnings announcement and was a net buy. Starbucks Corp. (SBUX) and Apple Inc. (AAPL), both of which traded downward after setting new highs around their earnings announcements, were also net buys. Walt Disney Co. (DIS), which also traded at a new all-time high following its earnings announcement, was another net buy.

Financial sector issuers Bank of America Corp. (BAC) and Citigroup Inc. (C), which both traded upward in May, were popular net sells. Widely held dividend payers Microsoft Corp. (MSFT) and General Electric Co. (GE) were both net sells as well. Sirius XM Holdings Inc. (SIRI) was net sold in May as it rose slightly from a level of support around $3.80 during the month. Mining company Freeport-McMoRan Inc. (FCX) was also net sold, as it traded at a year-to-date high.

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 May 2015, 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

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