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TD Ameritrade’s Investor Movement Index: IMX Declined in August While S&P 500 Reached Record High

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TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE:AMTD) , is today releasing the Investor Movement Index(R) reading for August 2014. 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.

The August 2014 Investor Movement Index for the four weeks ending August 29, 2014, reveals:

  • Reading: 5.68 (compared to 5.85 in July)
  • Trend direction: Negative
  • Trend length: 1 month
  • Score relative to historic ranges: High

“Equity markets did continue to go higher, but instability from geopolitical events early in the month may have caused some hesitation among investors as the situation played out,” said Nicole Sherrod, managing director of the trader group, TD Ameritrade. “That said, the IMX is still very bullish and remains higher than what we saw in back in April, when it declined for the first time in seven months.”

Investors have had many events to consider recently including positive economic data amid geopolitical concerns related to Ukraine, the Middle East, an outbreak of the Ebola virus in Africa and Argentina’s debt default. TD Ameritrade clients reduced their equity exposure during the August IMX period, which returned the IMX to the levels we saw in April through June of this year. Equity markets began to fall in late July, which had some investors wondering if it was the start of a correction. However, equity indices quickly reversed course in August, rising sharply. The S&P 500 broke the 2000-point barrier, setting a new high, while both the Dow Jones Industrial Average and NASDAQ also traded at record levels. Small cap stocks measured by the Russell 2000 index were recently still trading below the high set in July 2014.

Equity buying in the August IMX period appeared focused on names in the news like Walgreens (WAG), which decided not to move its headquarters overseas to potentially benefit from lower corporate tax rates; Kinder Morgan Inc. (KMI), which announced restructuring plans to buy its publicly traded limited partnerships; and Tekmira Pharmacueticals (TKMR), which is working to develop an Ebola vaccine. Dips in popular names like Sprint (S), Transocean (RIG), and 3D Systems Corp (DDD) may also have prompted TD Ameritrade clients to buy during the August IMX period. Recent IPOs MobilEye (MBLY) and El Pollo Loco (LOCO) were popular buys as well as clients built positions in the issuers.

TD Ameritrade clients were net sellers overall for the August IMX period, matching the reduction in equity exposure seen in the decline of the IMX score. The technology sector led the way in the selling, with many notable names sold — including Intel (INTC), Microsoft (MSFT), and Advanced Micro Devices (AMD). Each of the stocks had recently begun to recover from a dip in price. The stock price of Twitter (TWTR) had been under pressure since late January, but jumped higher following their earnings announcement at the end of July. TWTR continued to move higher in August, and our clients were net sellers. Nokia (NOK) was also a net sell as the stock fell sharply and then recovered during the month. Citigroup (C) and Goldman Sachs (GS) were both popular sells in the financial sector as well.

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 August 2014, 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.

About TD Ameritrade Holding Corporation

Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE:AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how – bringing Wall Street to Main Street for more than 39 years. An official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams, as well as an official sponsor of the National Football League for the 2014, 2015 and 2016 seasons, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information.

Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)/SIPC (www.SIPC.org) Source: TD Ameritrade Holding Corporation

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