Institutional Selling

[walterw]

notouch: I would suggest you look at the very first post of this thread and evaluate for yourself if this index doesnt has a valuable information.... by the way found it on esignal symbol is : $XII thanks Soul for help. cheers Walter.

[notouch]

I've read the first post of the thread but my question is really just a factual one. What does the Institutional Holdings Index measure?

[notouch]

Well to an answer my own question it seems to be an index of 22 stocks. On what basis these stocks are chosen I don't know. I guess it's some sort of ETF. But if you're thinking that this Institutional Holdings Index is a measure of institutional buying and selling, I don't think it is.

^IXH: Components for INSTITUTIONAL HOLDINGS INDEX - Yahoo! Finance

[walterw]

Amex Institutional Index
The Amex Institutional Index (XII) is a capitalization weighted index of 75 stocks most widely held as equity investments among institutional equity portfolios. The index is designed to reflect the performance of core stock holdings of institutions. The XII Index was established with a base value of 250.00 as of June 24, 1986. (The index value was later split 2-for-1 on May 19, 1998.)


I understand you can see what bigbrother is doing... cheers Walter.

[notouch]

The Amex Institutional Index is completely different from the Institutional Holdings Index. Both of them are sort of interesting but they don't really tell us what "big brother" is up to. Google, for example, is in the Institutional Holdings Index but is also very popular with retail investors. So if retail investors started dumping their Google stocks this would have a negative impact on the Institutional Holdings Index but the institutions could be buying what retail is selling. Also we don't know who these "institutions" are. They probably include pension and mutual funds who are usually classified as "dumb money". Trading syndicates on the other hand are not institutions even though they are definitely smart money.

[dalby]

one of john carter's "thangs" is to watch MER (merrill lynch) and the brokerdealers (XBD) and the Banks (BKX) indexes to at least get somewhat of a hint of what institutions are doing.

i think this is a decent proxy. i do find that when BKX and XBD are diverging from the dow, one or the other will give. it's also a rare to see a real rally sustain itself without heavily green XBD and BKX and the opposite for a selloff.

[walterw]

	Quote:	notouch
	The Amex Institutional Index is completely different from the Institutional Holdings Index. Both of them are sort of interesting but they don't really tell us what "big brother" is up to. Google, for example, is in the Institutional Holdings Index but is also very popular with retail investors. So if retail investors started dumping their Google stocks this would have a negative impact on the Institutional Holdings Index but the institutions could be buying what retail is selling. Also we don't know who these "institutions" are. They probably include pension and mutual funds who are usually classified as "dumb money". Trading syndicates on the other hand are not institutions even though they are definitely smart money.

XII.X is the symbol used in this thread, happens to be the Amex Institutional Index, how can we determine what is smart money can become a very subjective topic and beyond this thread spirit, the divergence shown before the 2/27 fall was clear... If its smart, dumb, idiot money I dont know... but its clear that the "institutional" sector was not bullish anymore on does dates previous to the fall.... I dont think this indexes are there for nothing, they have been built to be monitored, Notouch : If you dont believe in them, just dont use them... simple, like any other techniques been thought here, it is a little faith sometimes what puts you in action, being so pesimistic will keep you on a closed actitude too some things that can be of very good help...
cheers Walter.

[MrPaul]

This may help clear things up. I originally mentioned the core holdings index after looking through a stocktiming.com report on China/the S&P/ and the core holdings index

Stock Timing - Daily Update

In hindsight they were spot on...

The point was divergence and non-accumulation, not so much this leads that etc.

Hope that helps

[notouch]

Interesting article MrPaul but I think it contains a lot of flawed thinking. For a start it only contains one example. Obviously you'd need to see it repeated many times before drawing any conclusions. It also makes the mistake of thinking that just because one of these institutional indices are not going up this represents institutional selling but that isn't necessarily so. It just means some common stocks that are held by some institutions (as well as the general public) are underperforming compared to the S&P 500. I don't think you can jump to the conclusion from that that every time these institutional indices diverge from the S&P 500 then the market is about to crash.

That XII index contains all the DJIA stocks plus 45 others. For example while the DJIA only contains Coca-Cola, XII also contains Pepsi. I doubt it will prove as useful on a long-term basis as some here seem to be believe.

^XII: Components for AMEX INSTITUTIONAL INDEX - Yahoo! Finance

[walterw]

Well, in this case it did crash... lol. notouch: you should take into acct that sometimes some concepts do not need a cientific backtesting... the core concept is there.... by no means one index will represent the entire institutional holdings, but there is an old saying in my country that says "para muestra basta un boton"... one example is enogh to know whats inside the entire box... that means that that index could be representing a lot more... example the dow index is build with just 30 stocks... but its says a lot and it speeks for the entire nyse... openes of mind can be very helpfull on the interpretation of this indexes... cheers Walter.