iInvest® Stock Market
Institutional “Smart Money” jumps in!
In our October 3rd iInvest® ALERT, we pointed out the positive and bullish implications of some of the indicators the iInvest® Team analyzes on a day-to-day basis. One thing we monitor closely is the activity of Institutional “Smart Money”, as they have the greatest control and influence over market movements and determining future events. When the large institutions step in with major buy programs it pays to take notice.
During the last hour of last Thursday’s trading session, we saw a huge amount of institutional “smart money” buying, most of it occurring around the S&P 500 2750 level. Recall our iInvest® State of the Market Newsletter (September Edition), where we pointed out the major buyprograms at the 2600, then 2700 levels on the S&P 500 during the February mini-crash, letting us know these levels should act as strong support going forward.
Major buy programs by Institutions not only point to significant stock market bottoms ahead, but history shows the stock market via the S&P 500 is up 1, 3, 6 and 12 months later after major buy programs occur. In fact, the average gain one quarter later is 6.2%, which would put the S&P 500 back above 2900 in January.
As Rennie Yang from Markettells defines it, this was a major buy program, not just a standard buy program (which is positive in itself). Major buy programshelp us determine if a significant stock market bottom is in sight, normally within a few trading days.
In the chart below, you can see major buy programs of the past. It is when Institutional “smart money” steps in (or does not) that lets iInvest® know the prevailing trend, thus letting us know if our clients should remain fully invested up to original asset allocations, and/or whether a TacticalSHIFT® is needed.
Major Institutional Buy Programs 5-Year Chart
Written by Craig Dillon
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