Thursday, June 18, 2009

Insiders

Are Insiders Buying or Selling?

So what if they are?

What do they know?




With the help of the following charts from SEC Form-4, an excellent service for Insider Buying/Selling data, let's see if we can't answer these questions.

Starting with a couple of sector-specific charts, since they reveal so much, so clearly and unequivocally:


Technology



The above chart represents the ratio of Buys/Sells by insiders in the Technology sector (blue line). Against that ratio is plotted a chart of the Nasdaq (red line). Notice how all of the peaks of insider buying corresponded with important market lows. Conversely, all of the lows in insider buying correspond with important market highs. Finally, look at how insider buying in technology peaked at the November, 2008 lows and then peaked at a lower level at the early March, 2009 lows.


Financial


Same analysis, same colors, same uncanny correspondence of Insiders buying/selling at key market reversals. The only difference is that unlike in the Technology sector, the peak of Insider buying in early March, 2009 was higher then the peak in November, 2008.


Total Market


Opening the same analysis up to the total market, a similar correspondence is evident. It looks like insider buying levels currently are about what they were in the first six months of 2008. We all know what happened next.



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2 comments:

met61 said...

Allan,do you trade any of the I-Buys for short term pops as in the past?
Thanks,Ron

Anonymous said...

That's a great service!

Thanks.