One of my favor market indicators is insider buying and selling. In passing, I have mentioned insider activity, but now it seems that these insiders are running for the exits. Insiders are not like public investors. In fact, many are privy to information that the average investors is not.
The revolving door relationship between corporate insiders (Directors, CEO's, CFO's, etc) and Wall Street brokerages is not a topic of discussion by the financial press. And believe me, most brokerage firm analysts are only as good as the information they receive from their buddies inside the companies they cover.
Corporate insiders and Wall Street analysts do a great job of covering for one another. This "unspoken relationship" fills the pockets of analysts and bankers with investment banking fees, while insiders benefit from selling huge amounts of stock grants and options. I encourage you to get the book, "Wall Street Meat", written by Andy Kessler, a former analyst with some of Wall Street's largest investment banks. If you own a single stock, bond or mutual fund, this book is a must read.
Here is a random list of top insider buy/sells over the past 35 days:
8/4 B 56 S 337
8/3 B 101 S 324
8/2 B 65 S 238
7/29 B 50 S 187
7/25 B 36 S 112
7/15 B 38 S 120
7/14 B 37 S 157
7/13 B 36 S 146
6/30 B 49 S 121
I comb through insider trading on a daily basis, and I have not scene a positive trend for a long time. Until the numbers above reverse themselves, I am going to stick with my long term predictions for the market.
As a footnote, many of the insider buys are companies that I have never heard of. Many of the sells are from companies you and I are familiar with.
