Follow What Institutional Investors are Doing

By: Marty Chenard | Tue, Feb 21, 2012
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This will be a day where we share one of our paid subscriber charts as a courtesy to our free members.

What's the chart? It is a chart that shows the Net of Institutional Investor Buying and Selling activity on a daily basis. If there is more Institutional buying than selling, then they are in Accumulation and seeing that they are the biggest players in the market, then the market will go up. The opposite holds true when they are selling more than they are buying.

On November 25th, the Institutional Investors showed a bottom on their Distribution. Note how Institutional Accumulation has shown a good positive level of Accumulation since December.

A good philosophy might revolve around the following... Institutional Investors spend "millions and millions" of Dollars on research, computer trading programs,and expert traders. They own over 50% of all the market Dollars invested, so they are a formidable force in the market.

Also note that while the Institutional Accumulation is positive, its trend lines show its second "lower/low" since January 31st. What does that mean? It means that there is a down trend in Accumulation, and that means that as the market moves higher and higher, Institutions have been slowly taking some profits and lowering their exposure.

Anyway's, what's the Philosophy?

Since Institutional Investors spend a LOT more money on research... a lot more than most anyone else can afford, why not follow what they do? "What they do" is a conscious decision after they have analyzed all their expensive research and data. Following what they do is akin to knowing what they know for a very small price.

 


 

Marty Chenard

Author: Marty Chenard

Marty Chenard
StockTiming.com
Asheville, NC 28805
Tel: 828-296-1200

Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. 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.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/