Well, it looks like we’re now firmly in a pig market. It’s not a bull market due to the fact that it hasn’t been able to reach a new high since last summer (among other reasons), and it’s not a complete bear market right now after a 3-month climb.
With direction scarce and uncertainty aplenty, now is the time to look to those who have the most information and even more money on the line – company insiders.
Be sure to listen closely; they’re giving us their strongest signal since October at this very moment…
Because of the massive advantage they have, insiders have to adhere to strict rules as they pertain to reporting the buying and selling of shares of their own company.
So when it comes to trading, an insider is defined as anyone who trades a company’s shares based on information about that company that is NOT public knowledge.
But the general everyday insider is simply a senior officer, director, or 10% voting shareowner of a company.
And those insiders are basically shouting from the rooftops right now…if you know where to look…
The message is clear, and one that they’ve only delivered once since all the way back in April of last year.
To explain their message, let me introduce the insider transactions ratio:
By reading the number of insider sales to insider purchases, the insider transaction ration determines the level of bullishness, bearishness, or neutrality among insiders as a whole.
Any reading under 12 to 1 is considered bullish, while any reading above 20 to 1 is considered bearish. Everything in between is neutral.
And right now the insider transactions ratio is peaking over 36!
That’s a massively bearish sign from the insiders, especially considering that the only time it’s hit these levels since this time last year was in October…
And that October reading gave us the hint we needed just before the market had a significant pullback from high levels down below its moving averages.
Could they be showing us the light just before another pullback once again?