Research (Investicniweb.cz)
Czech markets  |  January 05, 2013 19:06:26

How to earn on the stocks? Watch what they do major investment banks



groups of indicators that I follow, There is a new index called the BEST TRADERS INDEX (BTI). It is composed of shares which are apparently popular tools for long-term trading investment banks that are currently dependent on money from the Fed. And since you can also monitor the investment banks demand for money, can be based on creating a simple business strategy.

Shares popular investment banks are very stable trading instruments. Best Traders Index I created in order to monitor what they are doing crucial players in the capital markets.

BEST TRADERS INDEX - a leading indicator for the market

BTI is an indicator of banks' activities in the field of investment in equities. As long as the index is greater than the S & P 500 (SPY ETF), everything is fine and markets are likely to go up. That was at least the previous three years. At the top of the chart is the price of SPY (S & P 500), below BTI. The graph shows the moments when BTI SPY led up and down.

BTI vs. S & P 500

Various sources report that approximately 70% of all trades in the markets perform computer based algorithms. Greatly shortened the investment (or rather trading) horizon. Of days reaches a maximum of tens of days. And banks also make money on short-term trades. They buy when the rest of the market sells. This need to get rates down. The whole hype around fiscal cliff was, judging by the fact that banks' demand for money was at that moment on the highs and useless. Banks probably suspected that the problem is solved, because the opposite is not in anyone's interests of the powerful.

The strongest demand for money from the U.S. central bank is part of the investment banks at a time when the price is knocked down for a few days. Dependence is clearly evident from the charts. Banks' demand for money shows middle oscillator.

BTI investment banks and the demand for money from the Fed

Which strategy to choose when watching Best Traders Index, can be found on the web Investment

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