Market Overview

Are Retail Bears Coming Out Of Hibernation?

Are Retail Bears Coming Out Of Hibernation?
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This time around, it feels different.

In February, the TD Ameritrade Investor Movement Index (IMXSM) fell to a new two year low.


The score has declined four out of the past five months.

But here's the thing: in each of the preceding declining months, clients were actually net buyers of the broad markets. The score only declined because they were rotating into less risky lower beta positions.

Not the case in February. In February, they were actually net sellers of equities.

Related Link: How Crude Oil Hits Stocks Where It Counts

During the period, the S&P 500, Dow Jones Industrial Average, NASDAQ, and Russell 2000 indexes all posted gains greater than 4 percent for the period, with the NASDAQ ending the month within 2 percent of its all-time high.

An easing of tensions surrounding the Greek debt crisis in Europe, Federal Reserve testimony that reaffirmed patience in raising rates, and a slight rebound in oil prices early in the month seemed to reduce volatility and boost the markets.

But in the midst of all this positivity and euphoria, it appeared that our retail clients were taking some risk off of the table in the form of profit taking.

What were they selling?

February saw net selling in, Inc. (NASDAQ: AMZN), Netflix, Inc. (NASDAQ: NFLX), and Twitter Inc (NYSE: TWTR). Each saw their prices rise to levels of resistance during the month. Clients appeared to take profits in Boeing Co (NYSE: BA), whose stock price jumped higher following their earnings announcement at the end of January; the stock continued to climb in February.

Sirius XM Holdings Inc. (NASDAQ: SIRI) and JC Penney Company Inc (NYSE: JCP), both lower-priced names who have been popular with traders in the past, were also net sells.

What were they buying?

Oil producers remained popular in February, as Exxon Mobil Corporation (NYSE: XOM) and Chevron Corporation (NYSE: CVX) were net buys.

GoPro Inc (NASDAQ: GPRO) and Alibaba Group Holding Ltd (NYSE: BABA), both familiar names who had their initial public offerings over the last year, saw declines in their prices in February and were also net buys.

Apple Inc. (NASDAQ: AAPL) was also a net buy, following their announcement that new products would be debuting in early March.

Popular long term holdings remained fairly stable and our retail clients continued to favor Apple, Facebook Inc (NASDAQ: FB), AT&T Inc. (NYSE: T), and General Electric Company (NYSE: GE).

Image credit: Ascendas, Wikimedia

© 2015 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission. TD Ameritrade, Inc., member FINRA/SIPC.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Long Ideas Trading Ideas Best of Benzinga


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