Bearish Signals from company insiders at record levels
When company insiders (members of the board, officers, etc.) become heavy net sellers of stock of their company, this usually signals a market top. Right now, insider selling is at very high levels. But there’s been no correction. Yet.
Insiders tend to be early in their signals, but they tend to be right. While we agree that the present signal has been earlier than usual, this has just acted to increase our own concern about the potential shocks to the rally. Case in point is the market jitters on display last Wednesday after the Fed’s minor statement edit. Is that really the way a fundamentally undervalued market would have reacted? We don’t think so.
Translation: Look out below.
(Via Deep Audit, our favorite forensic accountant!)