Re uses of MF, I agree, it's been most useful for the direction of the market. That was what I was after when I started looking at tracking the net inflow/outflow from block trades. I primarily look at a total block MF number for about 200 stocks, and have found it a fairly good indication of overall direction. As an indicator,it doesn't have much lead time, sometimes a day, but it has been helpful to determine whether an upturn or downturn has much staying power. It's still a new piece of information to digest, so I mainly use it as a confirmation. When it diverges, I'm not sure how much weight to put on it.
In looking at individual stocks, I have found that even for stocks with relativly high volumes, there are many days with relativly few block trades as well as many days where the net is either slightly negative or slightly positive. I don't pay attention to data from those days. The number of block trades as well as the net flow should probably be factored in, but I haven't done anything with that. |
