iCharts Discussions

[mrchan09]

This is topic is surely not for those who don't believe in intermarket analysis.


1. Excerpt from recent 'profit confidential' newsletter:

When insiders are buying, investors usually think it is time to buy. When insiders are selling, it could mean something is up, and so investors might consider selling.

Argus Research has posted some alarming numbers from their corporate insider key indicator concerning the overall market, to which investors should pay attention. Their ratio showed that insiders are selling their shares at a pace not seen since July 2011. If you remember, dear reader, the market proceeded to fall dramatically in August, September and October of 2011.

Their key indicator, the corporate insider sell-to-buy ratio, stood at 5.77-to-1, which means that, for every 100 shares corporate insiders bought, 577 shares were sold by insiders of the company for which they work. If companies listed on the New York Stock Exchange are taken in isolation, this key indicator gets worse…8.2-to-1.

To put some perspective on this key indicator, in November of 2011, before the over 25% market rally began, the sell-to-buy ratio stood at 0.81-to-1, which means that, for every 100 shares insiders bought, only 81 shares were sold.

The recent corporate insider selling was confirmed by Trim Tabs Research. Their key indicator showed that insider selling for the month of January was five times insider buying, which, has thus far—for the month of February—increased at an alarming 15 times. For their key indicator, the interpretation is that, in the January market rally, for every 100 shares bought by insiders, 500 shares were sold. From February 1 to 13, the selling is accelerating rapidly: for every 100 shares bought, 1,500 shares were sold.

Insider selling, in isolation, cannot be the sole key indicator on which a buy-or-sell recommendation can be made. These numbers confirm the bear market trap that is currently playing itself out with this market rally. It seems that, while a few people were buying in January’s market rally (as evidenced by very low trading money), the smart money (corporate insiders) were selling into this market rally. Sounds like the smart money is the one to heed, dear reader.


2. One more from 'The Tycoon Report':

Are you in executive management for a publicly traded company? How about a director or officer with a ton of stock awarded to you as part of your compensation package?

If you are, I bet you’ve been dumping stock onto the open market lately, locking in some decent scratch.

If you’re not, you at least need to be aware of the recent activity of corporate insiders. While insider selling is normally seen as fairly routine and somewhat random, what is neither routine nor random is the recent acceleration.

In the month of February alone, as we cleared the 1320 level in the S&P 500, cumulative corporate insiders have unloaded over $2.3 billion in stock, while insider buying in that same period totaled only $150 million. That’s over 15 to 1, sellers to buyers. The acceleration and ratios are on a similar pace to July, 2011 (blue arrow in above chart), just before the summer swoon.

[ajayhkaul]

Insider selling, in isolation, cannot be the sole key indicator on which a buy-or-sell recommendation can be made. These numbers confirm the bear market trap that is currently playing itself out with this market rally. It seems that, while a few people were buying in January’s market rally (as evidenced by very low trading money), the smart money (corporate insiders) were selling into this market rally. Sounds like the smart money is the one to heed, dear reader.

Thats why ..... smart money says ( repeat after me
)

Buy from them when they are puking and sell it to them when they are quacking !

As you would have read in other thread , ducks are coming in flocks ... including a 67 year old gent who sees a great opportunity suddenly.

Someone should tell him the stock market experience ! here it is :

Market is a place where people with experience get the money and people with money get the experience

[vinay28]

initial selling always provides volume in the market to trade higher later on

[ajayhkaul]

[jyothi2011]

true true true!!!!!!!!!!!!