Who are the Big Guys?
If you’ve studied the market, you know by now that the “Big Guys” are the Institutional Investors. Since they own over half the market’s equities, they essentially control the market.
If they are Selling, the market has tremendous downside pressure as they take their profits. If they are Selling while in an expanding Distribution mode, then they are not buying at all and they are dumping their shares (the worst condition of all).
Take a moment to look at the posted chart below. The bottom of the chart shows the trending of Institutional Selling.
On top of the chart, we posted the NYA Index so that you can see what happens when Institutional Investors start a trend of Selling and a trend of no Selling.
Like it was discussed on Rule #1, the size of the spread between the red and blue lines determines how strong the up or down trending will be on the NYA Index. With that in mind, take a look at the charts showing Institutional Selling Trends below:
For a comparison study, here is another Institutional Selling chart from another year …
A quick question for you … would you be a more profitable trader by using this kind of chart every day, or investing in the opposite direction when looking at this Institutional Selling chart … FYI … it is posted every day.