Change Billing / Login Update Email Contact Us Logout
|
|
CorporateInsiders
|
|
Change Billing / Login Update Email Contact Us Logout
|
||
|
|
|||
|
CorporateInsiders |
|
|
 |
This page contains analysis by Insider Insights, and does not necessarily represent the views of Sundial Capital Research. The weekly viewpoints and charts from Insider Insights are presented to subscribers of sentimenTrader as an aide in your attempt to determine current levels of investor sentiment. Insider purchases and sales take a unique skill set (and a good amount of experience) to evaluate correctly, which is why we have decided to partner with the experts at Insider Insights. Please go to www.insiderinsights.com to view more of their unique and value-added research.
August 27, 2010
The rolling 4-week average of our insider buy/sell ratios (aka our Insider-Based Market Indicator) rose again last week, spurred on by a positive weekly ratio. Yes, there were actually more companies with insiders buying their shares in the open market last week than selling them. But as we have explained constantly in this section, it is absolutely normal for top-down insider ratios to grow more bullish as the market falls. The short-term bottom tends to correspond with the ratios inflecting strongly downwards after an uptrend. In other words, we think it very premature to use insider data to justify a bullish bias on the market. To the contrary, we feel strongly that it’s just a matter of time until the “pay-for-it” phase of this crisis hits equity valuations again. The reform, austerity, and fiscal discipline necessary to deal with the enormous sovereign debt loads built up to combat the financial crisis and recession should see to that. But we’re not so stubborn with our bearish bias as to presume that next week has to be the time stocks finally succumb. The bubble years illustrated starkly the extended period serious economic is- sues can be ignored by financial and political leaders, as well as investors. And as the Charts below indicate, our Insider-Based Market Indicator has been at a point for weeks now that has marked a near-term bottom during other periods when investors weren’t ready or willing to acknowledge troubling macroeconomic issues—most notably during the bubble years of 2003 through 2007. But if indices do manage to rally from here, we will likely continue selling (and selling short) into it. We won’t really trust a rally again until our Insider-Based Market indicator inflects bullishly downward after rising into positive territory again. That last occurred in early April 2009—which corresponded with the March 2009 rally. We think the odds remain uncomfortably high that our ratios and Indicator will continue trending north in coming months as indices slump again. Consistent with our concern, we are maintaining our very defensive cash level of 50%.
© 2001-2010 Sundial Capital Research, Inc. All rights reserved. sentimenTrader.com is a trademark of Sundial Capital Research, Inc. Sundial Capital Research, Inc. 12527 Central Avenue NE, Suite 165 Blaine, MN 55434 |
|
|
 |
|
|
