I think it’s human nature for people to be more skeptical than optimistic. Much of that I would attribute to fear being stronger than hope or even greed many times.
That’s why I think the ‘elite’ class of Wall Street is often more bearish than bullish. Moreover, in the rare times that they do give off a ‘time to buy’ signal, it’s usually a weak, blinking light in the distance rather than a ‘Bat-Signal’ for the entire market to see.
But this group of people on the inside seem to be yelling it from the rooftops right now!
So who are these people, and why should I listen to them?
This ‘elite’ Wall Street class that I’m talking about isn’t just some random group of investors and traders that yell louder than the others.
In fact, yelling isn’t really their thing at all.
I’m talking about the people who know the most about the stocks in the market because they know the most about the individual companies those stocks pertain to.
This ‘elite’ class is made up of CEOs, CFOs, and other officers and directors who have access to the privileged information about companies that have publicly traded stocks.
And this group of people with the most information unknowingly leaves us hints at times, one of which we can pick up by looking at how much they are buying and selling stock of their own respective companies.
We can translate these numbers with the Insider Transactions Ratio. When this ratio is under 12 to 1 sales to buys, it’s a bullish signal. When it’s over 20 to 1 sales to buys, we get a bearish signal.
Now, when this ratio goes into the bearish reading over 20, it can go often go as high as 30 to 1, and has even neared 40 to 1 a couple of times in the past couple of years.
But when it breaks down below the bullish 12 to 1 level, it rarely drops below 10 to 1. Yet that’s exactly what it recently did when it hit 6 to 1!
And that bullish indicator has come right along with a spike in the stock market that could continue for a solid period. That’s why I’m always researching the insiders, and while I’ll continue to bring you information like Insider Transaction Ratio readings.
