Ann: Response to ASX Price Query Letter, page-51

Hey @NoImSpartacus, I get this data from MarketLens.I'm a big fan of this type of data. I've used it for years with DayTradeScan but when they closed I was desperate. Luckily, I found MarketLens later.

The table I posted above shows the net value and volume per broker for Friday and Monday combined.Below is the extended table for Friday through Tuesday.It shows the results of broker actions over these days. You can see how many shares they bought and sold. But most importantly, you can see the net value and net volume of their activity. This is a good indicator of the "mood" of a broker's clients.

In this particular case, we can see that clients of Merrill Lynch are the biggest net buyers of shares over this period. Conversely, the biggest seller is Commonwealth Securities (CommSec), which services retail clients like us.This data doesn't directly indicate that Merrill Lynch clients bought shares directly from CommSec clients. For example, CommSec clients could have sold to Bell Potter, and then Bell Potter sold to Merrill Lynch. It doesn’t really matter to me. The key takeaway is the shift of shares.

There are about 50 brokers on the ASX, both big and small. Tracking all professional or institutional brokers can be difficult sometimes. I usually prefer to focus on retail brokers. There are just four major retail brokers. So, if these brokers are selling, it means the rest (predominantly professional brokers) are buying. Clients of professional brokers generally have access to better insights and resources - they are "smarter" than us. These clients are often investment funds, wealth management firms, or wealthy individuals. Professional brokers also have highly skilled analytics teams. So, I prefer to align my strategy with theirs.




The chart shows the accumulation or distribution of shares over time - from May 2024 to now. Each step represents the daily net volume changes per broker or group of brokers.There’s a feature to combine brokers and show their collective net position or accumulation, which I use often.In this case:Retail brokers: The four main retail brokers (targeting everyday investors).Investment banks: My custom group of seven brokers, including Merrill Lynch, JP Morgan, Goldman Sachs, etc.



This data is not a silver bullet, but it’s a good indicator. Like any indicator, it "indicates" trends and provides valuable information. Of course, it doesn’t work perfectly on every stock or at any random moment in time. However, over the years, I’ve developed several strategies that work well for different segments of the ASX.

My basic rule: Do not buy where retail brokers are buying actively or accelerating their buying speed. It’s a kind of insurance or hedge. I believe this rule has saved me a lot of money, and the cost of access to this data has paid off multiple times.


Here are a few recent examples from my trading:
SPR: You can see how investment banks have been accumulating shares here since June 2024, and the price action reflects that. Retail investors sold, not seeing further value.




Another example - PER: A drop from $0.12 to $0.01 in two months.

As you can see, Citigroup clients started selling massively without any apparent reason. Everyone was waiting for study results scheduled for mid-December. Clinical trial updates were encouraging, yet the second-largest shareholder began aggressively selling.That was a glaring red flag for me. I noticed it but, unfortunately, somewhat ignored it. I sold half my position before the results announcement but lost the other half.

That’s another story about risk management and how you use indicators in trading. To put a positive spin on it, I did save half of my position by selling before the price plummeted further.

I didn’t plan to go into this much detail when I started replying, but here we are! I’m just excited about the insights this data brings.I hope this answers your question!