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PureBytes Links
Trading Reference Links
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Here are a few websites/sources, some free, some paid - that
track institutional activity of buying/selling.
It is presumed that a block trade is sponsored by institutions
for their own account or acting on behalf of clients. The retail trader
(including the day trader) is presumed not to swing a bat the size of
>$200,000 or >10,000 shares per pop.
It is also presumed that the reader knows that the better
institutions build positions by buying into weakness and liquidate positions by
selling into strength. CANSLIM types of setups are layups for booking gains in
the institutional world.
Also - snapshots of a single day's activity (like yesterday)
are meaningless as far as drawing conclusions is concerned - one needs to watch
the cumulative impact of institutional buying/selling.
After all, each trade has 2 sides - so who are we to judge
that one institution's dump isn't another institution's inventory
build?
It is the price at which that trade takes place that defines
accumulation/distribution.
On upticks, someone is urgently buying. On downticks, someone
is hitting the bids in the "get me outa here" mode.
Most block trade data & tape reading works well on NYSE
stocks because they report each trade sequentially - Nasdaq, on MOST names,
doesn't do that with any consistency.
Given all the above caveats - and then some:
a/ I-Watch at Thomson Investors Network:
If the link below breaks on your email reader, go to <A
href="http://www.thomsoninvest.net/index.sht";>http://www.thomsoninvest.net/index.sht
and find "I-Watch" on the left menu bar.
<A
href="http://iw.thomsoninvest.net/iwatch/cgi-bin/iw_page?group=0&1=Go&temp=home";>http://iw.thomsoninvest.net/iwatch/cgi-bin/iw_page?group=0&1=Go&temp=home
Data is delayed for the free section.
b/ Q-Charts has a reporting feature that presumably captures
all block trades. It costs $80 per month and can be found at <A
href="http://www.quote.com";>http://www.quote.com
One can use Q-Charts' time & sales to export data into a
spreadsheet and see sequential buy/sell interest on block and non-block trades.
This is what I do, and I guess this is the modern day version of tape reading
101.
c/ Bloomberg terminals have a function called Money Flow,
which will also get you what the homegrown Q-Charts or any other time &
sales spreadsheet will - except with the ease of a few punched
keystrokes. Their website & TV program show snippets of this function.
You can read about it here and see the webcast, free daily:
<A
href="http://www.bloomberg.com/tv/moneyflow/";>http://www.bloomberg.com/tv/moneyflow/
I caution you re the term Money Flow: This is how it is done,
not the money flow indicators that come in canned packages or seen on other
websites - most of which are derivations of OBV, which is a flawed concept as
far as tape reading is concerned. It indicates something (hence it may be a
valid indicator) but it ain't tape reading based accumulation/distro which needs
tick level data and not assumptions like "price closed up so all the day's
volume = accumulation".
CNBC one day launched their "money flow" section in the
evening hours with much fanfare around the time they extended the Insana program
by 30 minutes and debuted their trading wall. The indicator was given by
Reuters. One quick check basically told me that it was OBV with a 21 day moving
average. I emailed them that they were up the wrong path and they killed it
(the segment). I wish they'd taken it up and delivered the research instead - it
would've been nice.
Also - the Bloomberg Money Flow web page shows institutional
activity only, and for the past 6 months only. There are non-institutional and
longer term influences as well on acc/distro, and these are sometimes at odds
with institutional accumulation.
Eg - yesterday's rally in Intel was purely retail buying.
Institutions weren't playing any significant role. Today's rally on Citibank is
purely institutional - retail isn't playing much of a part early on. Both mean
nothing on a day-by-day basis.
Over time, though, such stuff adds up. You can see today's
feature on Bloomberg, GLW - and you will see that there is a floor to the price
(from technical analysis), there is institutional accumulation more
persistent than a one day/week flash in the pan, and you see in IBD that 80
funds bought $4.8 billion worth of stock.
So you start believing that support is real support and not an
ephemeral technical price level.
Hence it is recommended that one maintains one's own trade
level database to arrive at what counts as accumulation/not.
As you know, money flowing in doesn't mean prices have to go
up - and it is price action that puts $$ into the bank account.
d/ IBD reports exchange-level block trade data + top-rated
mutual fund accumulation / distribution on a daily basis for a selected group of
funds. Each Friday's issue lists top buys & sells of mutual funds that
are performing in the top 5% of the mut fund universe on a trailing 3 year basis
- with specific amounts invested at company level.
e/ Laszlo Birinyi has his own research shop that basically
lives off of such research. His work can be found at <A
href="http://www.lbirinyi.com";>www.lbirinyi.com - most of it is
expensive research, but he writes regular columns for Forbes and appears
frequently on Wall Street Week and CNBC. A link to his prior Forbes articles is
here - <A
href="http://www.forbes.com/columnists/";>http://www.forbes.com/columnists/
You can dig into the archives and see his public
recommendations - and compile the track record from 1997 to date for
yourself.
All these are "big picture" spice. They don't matter much to
people using charts to trade. They don't tell you anything except "this is what
is happening" - so beyond wanting to know why, they don't serve any purpose for
the tactical trader.
They are also not the "holy grail" mother of all indicators
etc. Institutions, like individuals, can be and often are wrong. The term they
prefer to use is "early", but wrong is wrong. For every stock picked by Laszlo
Birinyi or the Bloomberg page or the IBD universe or any other source, there
were 5 others that did better/worse. So - one could take the copout and say "so
what, in a bull market, anybody's a genius".
They are - until they met a Nokia. Or a P&G. Or, for that
matter, a Home Depot.
For the patient investor (no pun intended, though most
"investors" might feel like patients of the emergency ward these days) - this is
a priceless tool. It goes back to the days of Jesse Livermore and Humphrey
O'Neil and is still valid these days in the land of Laszlo Birinyi.
Hope this helps. Some friends are insisting that I write up
some stuff on this for TASC so you may soon read about all this in print - but
recent events have not permitted the luxury of the time needed to do justice to
their editorial dept. Maybe some day soon...
Gitanshu
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