One of my favorite indicators in all of the financial markets has finally just given me the first signal like this since July, which is saying something since this signal normally triggers a couple time per month.
And when we’re in a market like this one, we need as many things pointing us in the right direction as possible.
This time it’s coming straight from the insiders themselves, so let’s see what they’re telling us…
Whether they realize it or not, the insiders leave us subtle hints sometimes based on their actions and how they’re using their money at any given time.
That doesn’t matter much to them, but it could make or save you and I thousands upon thousands of dollars. We just have to know how to find and interpret those hints when they happen.
Well one of my favorite hints just triggered an alert, and I’m bringing it to you know because I think you need to hear it.
In the past I’ve talked about what is called the ‘Insider Transactions Ratio’ a few times. If you don’t know, this indicator tracks the ratio of insider sales to insider buys.
Here’s what you need to know about the basics of the Insider Transactions Ratio:
- An ‘insider’ is any company officer, director, or 10% owner.
- Any reading under 12 to 1 is bullish.
- Any reading over 20 to 1 is bearish.
And just before I started writing this column I saw that the insiders are giving off their first bearish signal since July…
That’s because the insider transactions ratio has just given off a reading of 20!
Considering that the last signal like this happened before the big market drop that happened in August (just after the July bearish reading), I’d say it’s time to take note of what the insider are telling us.
We’ve already been on high alert since we’re in the midst of a market transition, but this just tells us that we need to shorten the leash on our bullish positions even more.
If I know the insiders are beginning to expect another drop, I certainly won’t be surprised when it happens…
