In this second part today, we explore a second strategy that once again comes from Marty Chenard at StockTiming.com. It is also extremely valuable, and it has to do with Institutional Investors.
As many of you know, Institutional Investors own over half of all the stock market equities. In fact, in 2009 institutional investors owned 73% of the outstanding equity in the largest 1,000 U.S. corporations.
That means that just investing in the same trend they are in will produce a must needed advantage for investors. It is why the old adage about "Never go against what Institutional Investors are doing or you will get hurt" is true.
Chenard's Recommendation is: "Follow the Accumulation/Distribution trending of Institutional Investors. Invest in the same direction with stock market ETFs and only change direction when the Institutional Investors do ... never go against them. It is simple and very effective."
In the chart below, the blue lines represents the amount of daily Buying and the red line represents the amount of daily selling by Institutional Investors. Look for clear differential differences between the red an blue lines. The wider the gap is expanding, the greater the intensity of buying by Institutional Investors. When the gap between the two lines starts to shrink, the amount of Accumulation or Distribution is also facing a reduction and that has the same impact on the stock market.
Basically, when the blue buying line is above the red selling line, then Institutional Investors are in Accumulation, and when the red selling line is above the blue buying line, then Institutional Investors are in Distribution. (Note: This chart is updated and posted daily on our Advanced Investor subscriber site.)
Coming tomorrow ... a tip from an "old time investor" about avoiding confusion and finding the best data for hitting home runs.