The brokerage noted that retail investors pushed their Investor Movement Index (IMX) up above 7.0 for the very first time in history — an all-time high for the sentiment indicator used to measure bullishness among the investing public. TD Ameritrade published some notes on the reading via press release:
July marked a historic milestone for the IMX as it crossed 7.0 for the first time ever, in part due to retail investors’ bullish activity. TD Ameritrade clients were net buyers for the sixth consecutive month, seemingly positioning their accounts for increased exposure through equities, such as Amazon (AMZN) and Tesla (TSLA). Over this same period, major market indices climbed to new highs — Nasdaq, S&P 500 and Dow Jones Industrial Average posted positive gains — earnings reports were positive with over 70 percent of S&P 500 companies beating analyst estimates, and the VIX touched an all-time low of 8.84. Investors who closely followed the markets in July may have seen these events as opportunity to stay engaged and potentially grow their portfolios. For a third month, technology stocks were among TD Ameritrade clients’ top buys.
At the end of July, the IMX was at 7.09. That’s up from 6.58 at the end of June, and as mentioned previously, is a new all-time high. The trend direction remains positive, while the trend length grows to three months long.
With bullishness at such extended levels, it’s likely that stocks have further to run from here, although a pullback likely looms at some point as things get a bit overheated.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was trading at $220.88 per share on Monday afternoon, up $0.31 (+0.14%). Year-to-date, DIA has gained 13.11%, versus a 11.80% rise in the benchmark S&P 500 index during the same period.