A Data Conflict Between the Two Institutional Investor Groups
Will this end up being good news?
Every night, we download data from Wall Street that shows what the daily levels of Institutional Buying and Selling were for the current stock market day. We then do a trending analysis of the Buying and Selling activity. What is important is whether or not Institutional Investors are in Accumulation or Distribution because the market cannot overwhelm the aggregate Buying and Selling activity of Institutional Investors.
At the same time, we do another (private) cut on the analysis that shows (what we call the "Aggressive Institutional Investors") and what they are doing. This analysis shows the Accumulation/Distribution levels and trending for what is going on with the Aggressive Institutional Investors. (We always comment about their activity in conjunction with the regular Institutional Investor Accumulation/Distribution chart shown below.)
Well yesterday, we had a data conflict between the two groups. I say conflict, because It turns out that the Aggressive Institutional Investors went into their first day of low Accumulation, while the regular Institutional Investors were still in Distribution.
History tells us that it often takes time to turn the regular Institutional Investors around . This is probably because of the sheer mass of their wealth, or that the Aggressives can't always turn them around if there is too much opposition and disagreement on what they are doing.
So, that is where we were yesterday. This represents a conflict by Major market participants and it will likely need more time to work itself out. For investors, this means that they should be very cautious and avoid "guessing" which side will win and when. After all, investing is just that ... a prudent decision making process based on advanced data and principles. It is not a guessing and/or gambling game to see if your ego is right or not.