ANNANDALE, Va. (MarketWatch) -- Corporate insiders have recently been selling their companies' shares at a greater pace than at any time since the top of the bull market in the fall of 2007. Does that mean you should immediately start lightening your equity exposure? It depends on whom you ask. But, first, the data. Corporate insiders are a company's officers, directors and largest shareholders. They are required to report to the SEC whenever they buy or sell shares of their companies, and various research firms collect and analyze those transactions. One is the Vickers Weekly Insider Report, published by Argus Research. In their latest issue, received Monday afternoon, Vickers reported that the ratio of insider selling to insider buying last week was 4.16-to-1, the highest the ratio has been since October 2007. http://www.marketwatch.com/story/insiders-have-quickened-the-pace-of-their-selling-2009-07-28
I am going to begin shorting the market now using leveraged inverse ETFs. It's just much easier and way less time consuming than individual picking, even with though it's more expensive. It also negated concerns about locating stock to borrow and other such issues. Home and land prices continue to decline, most Americans feel worse about the future as tomorrow's CC survey will likely bear out, wages are under pressure, states and cities have severe financial crises to deal with, the federal government is attempting to borrow it's way out of this repression, and there is a demographic time bomb with tens of millions of boomers about to retire, far less wealthy than they were 5 years ago, and who will begin drawing a lot of government largess- this means higher taxes and more hostile business conditions for everyone else lucky enough to still have a job. This insider selling ratio is too high to be a random event, as I believe upper level management is looking at their order books and forward conditions and acting rationally. It's not the only factor I'm using to finally start entering some short positions. I actually believe China has serious issues and will not be able to keep stimulating domestic consumption to compensate for a buyers strike in the U.S., and as many here know, I think unemployment will approach if not exceed Great Depression levels. 2010 is going to be the year that Americans get to step 5 of the Kübler-Ross model, which is acceptance... ...acceptance that they will have to resolve themselves to adapt to a new world, lower living standards, and a permanent reallocation of their resources, while also acknowledging that this is going to be a painful, permanent change from a purely economic perspective.
Do NOT use leveraged ETFs, seriously. Carl Swenlin of decisionpoint.com predicts that the S&P 500 will climb to a minimum of 1200 before falling. Don't screw yourself.
I'm reading his commentary now. http://www.decisionpoint.com/ChartSpotliteFiles/090724_bt.html Thanks for the tip.
Who the hell is Carl Swenlin and what is his track record? I could point to dozens of "market experts" whose forecast was great, only in the wrong direction.
Don't forget insider buying was at an all time high right near the top. I can remember all the bullish write-ups back then; about how to prosper by following insiders and buying. What prescient advice that was. Sound odd? Don't take my word for it, go check. No one can say for sure what will happen; but both the common COT as well as insider buying type interpretations, were both extremely contrarian indicators in hindsight. You can keep blindly following the shepherds -- right off a cliff, or take some time to corroborate past facts. Wake up, somnaubules!