Art Cashin On A Scary Parallel Between Now And Last Summer (Insider Selling)

TBI ^ | 2-9-2011 | Joe Weisenthal

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Art Cashin On A Scary Parallel Between Now And Last Summer

Joe Weisenthal
Febuary 9,2011

In his morning note, UBS floor guy draws a scary parallel between the market today and last summer.

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Let’s Hope It’s Not An Omen - In his column this morning, Mark Hulbert notes that corporate insiders are “now selling their companies’ stock at a rate not seen since late last July. That’s a scary parallel indeed, since that late-July spike in selling came just days before one of the more painful two-week periods in the stock market in years.”

Hulbert then examines how aggressive some of this selling is:

Still, on the theory that corporate insiders — officers, directors and largest shareholders — know more about their firms’ prospects than do the rest of us, it can’t be good news that they are selling at such a heavy pace. Consider a ratio calculated by Argus Research of the number of shares insiders have sold in the open market to the number that they have bought. Last week, according to the latest issue of Argus’ service, the Vickers Weekly Insider Report, this sell-to-buy ratio stood at 5.77-to-1. And among insiders at companies listed on the New York Stock Exchange, this ratio was even more lopsided at 8.2-to-1.

Making these recent readings even more worrisome, according to Argus Research, is that they came on markedly stepped- up activity among corporate insiders. This increases our confidence that the ratio accurately reflects prevailing sentiment among a broad cross-section of the insiders.

In fact, Vickers is so alarmed by recent insider trends that this week it is selling big chunks of its two model portfolios and putting the proceeds in cash.

(snip)

[Night Hides Not]

Pretty simple, if you think about it:

1. They're going to need the extra cash to pay higher taxes.

2. Earnings are going to be lower compared to last year, which will drag down their stock prices.

They're also raising cash to get back in the market when Obama is voted out in November. If Obama wins, go back to #1.

[saintgermaine]

No big surprise, with some of the ignorant and dumb leadership we have in Washington. Some of those who claim to lead or run this country could teach courses to potential terrorists on how to wreck the economy of a once great country the quickest way possible and get praised on top of it for doing so.

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A Quick Look At How Much The Stock Market Has Died