Institutional Investor Accumulation/Distribution Levels

Below are the Institutional Investor levels and trending for Accumulation/Distribution since last November.

The chart show's short term good news and medium term bad news. How so?

Well, if you look at the chart, you can see that Institutional Investors are in Accumulation and that it is trending higher on a daily basis ... and that is good for the short term.

Now look at the two trend lines we drew from last November to yesterday. The trend line for the NYA Index is going up ... but when you look at the trend line for the Institutional Investor Accumulation levels, you can see that it is lower and going down.

What does that mean?

It means that as the rally matures, Institutions have been cutting back their exposure to the market. The two different directions in the trend lines is also saying that there is a negative divergence between the actions of the market and the buying by Institutional investors now.

If you have the feeling that Institutional Investors are not the "big guns" anymore and that they really don't impact the market, then take a minute to observe what happened to the market every time the Institutional trending shifted down.

What's the message from the chart?

Be ready for when the Institutional Accumulation/Distribution trend lines shift down because they will have a greater downside impact on the market the next time.