more-arw search

Insider Selling Increase May Indicate Bear Market

The markets may be entering bear territory again.

There has recently been an uptick in stock insiders selling off their holdings, and CNNMoney reports that this trend could be an indication that the economy is entering a bear market.

The news source notes that when insiders start unloading their stocks, it does not bode well for the

There has recently been an uptick in stock insiders selling off their holdings, and CNNMoney reports that this trend could be an indication that the economy is entering a bear market.

The news source notes that when insiders start unloading their stocks, it does not bode well for the future. According to author and professor Nejat Seyhun's book, Investment Intelligence from Insider Trading, stocks typically underperform if executives are selling shares, the source says.

Mark Hulbert writes for MarketWatch that it's possible the market has entered bear territory, and points to the Hulbert Stock Newsletter Sentiment Index - now 51 percentage points higher than last month - as further proof, since over the preceding six bull markets, the first month's growth was never that high.

"Is there any way for the market to escape the bearish conclusion to which contrarian analysis leads? Advisors would have to beat a quick retreat in coming sessions which, while possible, appears unlikely," he concluded, warning the record lows that traders saw on October 4 were "likely to be broken."
 

Topics: