Pragmatic Capitalism

Capital for Living a More Practical Life

Hulbert: Insiders are Turning Bearish….

The last time Mark Hulbert updated his insider trading data the market was in the process of bottoming.  He said insiders were very bullish.  How quickly sentiment changes in a month!  His latest update shows a huge reversal in insider sentiment:

“For the week that ended last Friday, this sell-to-buy ratio for NYSE-listed shares listed stood at 6.67-to-1. That means insiders, on average, were selling nearly seven shares of their companies’ stock for every one that they were buying. One month ago, in contrast, the comparable ratio stood at 1.54-to-1.

To put the current sell-to-buy ratio into a broader perspective, consider where it stood on those occasions this year when the stock market hit a high or low of more than just minor significance.


Sell-to-buy ratio for NYSE-listed stocks
Early May high, just before May-June correction7.11-to-1
Early October high, just before October-November correction5.13-to-1
Latest week6.67-to-1
Average over last 20 years3.41-to-1
Early June low2.01-to-1
Mid-November low1.54-to-1

As you can see from the accompanying table, the latest reading is both far above the long-term average and right in line with levels seen at the market’s intermediate tops earlier this year.”

Read more here.

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