Insiders Sell the Rally

Written By Brian Hicks

Posted June 30, 2009


yellow weed


Green shoots or yellow weeds. That’s the battle being waged on Wall Street these days.  However, for the people who should know the answer to this eternal question the verdict is already in.

According the “insiders” now is the time to sell stocks-not buy them.

That’s because according to, CEOs, directors and senior officers have accelerated their sales to the highest level since June 2007, two months before credit markets froze.

In fact, insiders of S&P 500 companies have been net sellers of their own stock for the last 14 weeks even as the broader markets have delivered the biggest stock rally in 71 years.

“If insiders are selling into the rally,” Joseph Keating, the chief investment officer of RBC Bank said, “that shows they don’t expect their business to be able to support current stock-price levels.” Instead he told Bloomberg, “They’re taking advantage of this bounce and selling into it.”

That is something to keep in mind as you break out the magnifying glass to search for those green shoots.

After all, to quote an old Englishman, lilies that fester smell far worse than weeds.

Related Articles:

Buffett: Economy is in a “Shambles”

Roubini Sees Significant Risk of a “Double-Dip” Recession

Prechter: U.S. to Lose AAA Rating

Green Shoots? Not According to Richard Russell

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