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Insider Selling Hits All Time Record Of $4.5 Billion In Prior Week As Everyone Is Getting Out Of Market

Tyler Durden's picture




 

Insiders have officially marked the top of the stock market: last week's insider selling of all stocks (not just S&P) hit an all time record of $4.5 billion. This is the biggest weekly number ever recorded by tracking company InsiderScore.com: as Sentiment Trader highlights no other week before had more than $2 billion in net selling. Furthermore, selling in just S&P companies hit a whopping $2.8 billion: over 4 times more than the week prior! As such the ratio of insider selling to buying is now meaningless. Even Bloomberg, which traditionally just posts the data without providing commentary to it, highlighted this ridiculous outlier: "Insider selling at Standard & Poor’s 500 Index companies reached a
record in the past week as executives took advantage of a two-year high
in the stock-market to sell their shares.
" We hope those retail investors who dared to reemerge in the stock market and play some hot potatoes with the big boys, enjoy their brief profit as they once again end up being the biggest fools.

Here is a stunning chart of insider trading activity, courtesy of SentimentTrader:

And this is what insider buying to selling in the S&P looked like last week. LOL.

 

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Thu, 11/11/2010 - 10:33 | 719173 Bill Lumbergh
Bill Lumbergh's picture

So much for the Bernanke thesis of the "wealth effect".

Thu, 11/11/2010 - 10:41 | 719188 tunaman4u2
tunaman4u2's picture

On the flip side of all this selling, these guys just got dollars instead of stocks... lets see how that works out. 

I just hope they don't move into Silver, I NEED a pull back! 

Thu, 11/11/2010 - 10:44 | 719203 Fish Gone Bad
Fish Gone Bad's picture

The market usually tanks when everyone thinks things will go on forever. This time it is indeed different. Everyone has had 2 years to get ready for our impending economic collapse and no one wants to a bath.

Thu, 11/11/2010 - 10:55 | 719240 iamse7en
iamse7en's picture

Yeah, I would like a pullback as well...  Nevertheless, I'll be buying silver even at $100... it's MONEY, not currency.

Thu, 11/11/2010 - 12:08 | 719496 jimijon
jimijon's picture

I like your AOCS avatar!

Thu, 11/11/2010 - 11:17 | 719299 jus_lite_reading
jus_lite_reading's picture

Can you blame them for selling? They know that the FED is pumping up their stock price and it's not worth half as much as it is now. They are locking in profits. The suckers are buying. Same game, different name.

Thu, 11/11/2010 - 10:43 | 719196 cocoablini
cocoablini's picture

The wealth effect is even easier to control because there is no profit motive in the stock market anymore. People selling now are locking in gains. The rest of the ownership is via the government through POMO bank cash trade in money. Banks are specifically told not to sell stock if they participated in the Pomo trade in. They were able to trade toxic poo for bonds and then cash to gun the stock market.
Even a declining equity is greater than any toxic asset or derivative.
There is no real motive to sell until the FED gets audited or a threat to bank bonuses. Then the banks rebel, and flash crash the whole thing.
It is easy to control the stock market now- the bond market which is 80x bigger is harder to control- that's the big problem for Benny and the ink jets.

Thu, 11/11/2010 - 11:31 | 719362 BRAVO 7
BRAVO 7's picture

go to now ye rich men, weep and howl for your miseries that shall come upon you.your riches are corrupted,you have lived in pleasure and been wanton. this day a grievous sore of poverty hath been left on the doorstep of AMERICA,thou art declared to be ICHABOD.
behold a pale horse

Thu, 11/11/2010 - 12:40 | 719617 flattrader
flattrader's picture

cocoablini,

You wrote--

>>>It is easy to control the stock market now- the bond market which is 80x bigger is harder to control- that's the big problem for Benny and the ink jets.<<<

Not so.  Only about twice as big.

http://larrycheng.com/2010/08/11/which-is-more-important-the-stock-marke...

This is important to understanding how things may come unraveled and their relative importance.

Do your homework.  Don't shoot from the hip.

Thu, 11/11/2010 - 10:44 | 719199 Fish Gone Bad
Fish Gone Bad's picture

.

Thu, 11/11/2010 - 23:32 | 721172 Minion
Minion's picture

Strangely enough, the second lowest sentiment point on that graph correlates with the early half of the last running of the bulls........  nowhere near the top.

 

Thu, 11/11/2010 - 11:05 | 719263 DaveyJones
DaveyJones's picture

he meant the "poor health effect."

Thu, 11/11/2010 - 11:12 | 719286 flagg707
flagg707's picture

Oh, I think the Bernanke "wealth effect" is doing exactly what it was intended to do - support the "plutonomy" and allow the Playerz to get out with as much liquid cash as they can prior to the coming, uh, realignment in market values.

Thu, 11/11/2010 - 11:19 | 719308 jus_lite_reading
jus_lite_reading's picture

"Realingment" in market values. I like that. That will occur after the "economic earthquake" with the catalyst being periphery defaults... T minus 4 days and counting.

Thu, 11/11/2010 - 10:34 | 719175 Silverhog
Silverhog's picture

This surprises me. I didn't think there was anybody left.

Thu, 11/11/2010 - 10:41 | 719187 EscapeKey
EscapeKey's picture

You thought executives had stopped granting eachother oversized option grants?

 

Thu, 11/11/2010 - 11:24 | 719333 cowdiddly
cowdiddly's picture

Exactly, Most people have not figured out that with the size of these options grants to upper management, the companies profits will never have anything left for shareholders. In a lot of cases, the companies future profits are distributed to the bonus pool leaving no hope for shareholder increases. This is why stocks have not appreciated over the last decade. The money was already stolen right under your nose. And all they pipe about is shareholder value. LOL  

Thu, 11/11/2010 - 12:16 | 719526 SteveNYC
SteveNYC's picture

Right you are. If you want to own equities, own them in Australia or Canada. Not to say that from a growth perspective they will perform better than US equities (although they probably will) but the dividend yields are for real. Profits ACTUALLY get distributed to shareholders, not just management. Cashflow actually exists in these countries.

Thu, 11/11/2010 - 10:34 | 719176 sheeple
sheeple's picture

no worries! POMO is coming up tomorrow!!!!!!

embrace "changes" =)

Thu, 11/11/2010 - 11:21 | 719320 TraderMark
TraderMark's picture

Jeremy Grantham video to be aired at 4:30 PM today (29 minutes)

[Video] CNBC - Jeremy Grantham Speaks

 

“The Fed has spent most of the last 15, 20 years manipulating the stock market, whenever they feel the economy needs a bit of a kick,” he added. “I think they know very well that what they do has no direct affect.”

Thu, 11/11/2010 - 12:20 | 719541 sheeple
sheeple's picture

Grantham being vocal lately

Thu, 11/11/2010 - 13:14 | 719702 Cruel Aid
Cruel Aid's picture

Reverse PPT or The FED looking for a little walkin around money via pump and dump.

Thu, 11/11/2010 - 10:39 | 719181 LongSoupLine
LongSoupLine's picture

Brian Sack to the rescue!!

Thu, 11/11/2010 - 10:39 | 719182 99er
Thu, 11/11/2010 - 10:42 | 719190 prophet
prophet's picture

Sentiment Trader rocks!

Thu, 11/11/2010 - 10:43 | 719192 max2205
max2205's picture

Today is a good day to die....or flash crash without the dead cat bounce

Thu, 11/11/2010 - 11:10 | 719283 dehdhed
dehdhed's picture

wouldn't surprise me because if they're gonna do it, this may be their last chance for awhile.

Thu, 11/11/2010 - 10:45 | 719205 SheepDog-One
SheepDog-One's picture

But the Zerohedge bulls insist the place to be is IN the market waiting for DOW 36,000, so that a cash-out can happen when the US $LOLlar is -0-. I never thought it was a good plan myself, I feel much better off with the PM's, bullets, beans, etc.

Thu, 11/11/2010 - 10:51 | 719224 Benito
Thu, 11/11/2010 - 11:08 | 719271 Rusty Shorts
Rusty Shorts's picture

Take delivery !!

Thu, 11/11/2010 - 10:53 | 719231 Village Idiot
Village Idiot's picture

funny. they could still be right, but funny.

Thu, 11/11/2010 - 10:48 | 719211 Dagny Taggart
Dagny Taggart's picture

Perhaps all the insider trading is coordinated. The PDs have the insiders sell part of their holdings. A pat on the back for a job well done for the banksters. "Take your profits, boys. And don't forget to cut yourself a righteous bonus as well." That spooks markets so PDs can buy lower when QE ass activity restarts. Except, I think there's a fly in their soup.

Thu, 11/11/2010 - 10:49 | 719217 SheepDog-One
SheepDog-One's picture

'QE ass activity'

I think it all centers around that indeed!

Thu, 11/11/2010 - 10:48 | 719215 hettygreen
hettygreen's picture

Ok so we know who is selling (company insiders) and how much (a whole shit-wack) but who exactly is buying? What sort of alchemy is at work here for such "robust" selling to be met with new highs? I thought all the mutual funds were at record low cash levels? I know this is crazy but why do I get the feeling government is the buyer and the bond market is just starting to catch on?

Thu, 11/11/2010 - 10:50 | 719220 SheepDog-One
SheepDog-One's picture

If the bond market guys are only now starting to catch on that the FED is the only buyer, then we are well and truely fuked!

Thu, 11/11/2010 - 11:18 | 719305 Popo
Popo's picture

Just waiting for the right trade...

It'll come ... And then Ben will be hog tied and squealing like a pig.

Do not mess with Mr. Bond Market. It makes him.... Angry....

Thu, 11/11/2010 - 10:49 | 719218 firstdivision
firstdivision's picture

They are selling to buy more NFLX and LVLT...look at those stocks go since open.  This is going to be spectacular now that the seams are tearing. 

Thu, 11/11/2010 - 10:51 | 719225 jory
jory's picture

Ballmer dumped $1 billion worth of Microsoft Dummies.  That's the reason.  No reason to report facts when Hype works so much better.  Buy Gold Lemmings.  LOL

Thu, 11/11/2010 - 10:57 | 719244 Jake3463
Jake3463's picture

4.5 billion - 1 billion is 3.5 billion.  Still a ridiculous number compared to insider buying transactions.

 

How did you beat the math question to post. 

Thu, 11/11/2010 - 10:58 | 719246 prophet
prophet's picture

Bad read dude- even without Balmer it was $3.6B - still a six year high, but why do diligence when being flippant works so much better.

Thu, 11/11/2010 - 10:58 | 719249 ColonelCooper
ColonelCooper's picture

You're oh so correct.  If you subtract the billion pulled out of Microsoft, it's only a record sell off by 1.5 billion.  Pure hype.  Move along.

Douche.

Thu, 11/11/2010 - 11:22 | 719322 SheepDog-One
SheepDog-One's picture

What are 'gold lemmings' and where can they be purchased?

Thu, 11/11/2010 - 10:53 | 719227 SheepDog-One
SheepDog-One's picture

And dont look now, PM punchers, but gold and silver are again deep in the green. Damn Harry must be coughin up blood by now.

Thu, 11/11/2010 - 23:34 | 721179 Minion
Minion's picture

I think you're the one with the axe to grind.  :)

Thu, 11/11/2010 - 10:55 | 719235 trav7777
trav7777's picture

so who in the holy hell is buying?  Insiders are selling, mutual funds are outflowing...where is the mkt support coming from?

I think this only leaves the Fed...

flash crash day showed us that there are NO size buyers even 10% below last...

Thu, 11/11/2010 - 10:59 | 719253 EscapeKey
EscapeKey's picture

Lots of buyers... the PDs, the PPT, the... er, did I mention the PDs?

Thu, 11/11/2010 - 11:04 | 719259 ColonelCooper
ColonelCooper's picture

Trav.  Stop asking questions.  They only serve to bring into question the effectiveness of the recovery.

Thu, 11/11/2010 - 10:55 | 719237 nedwardkelly
nedwardkelly's picture

MSFT accounts for most of the sales, of which Balmer is responsible for nearly all of it. Balmer sold $1.3bn of MSFT for 'tax planning' purposes.

Even still, take him out as an outlier, and total sales are still 50% higher than the next highest weeks...

Thu, 11/11/2010 - 11:00 | 719254 Jake3463
Jake3463's picture

Oh look, Cisco is on that list again.

Thu, 11/11/2010 - 11:04 | 719261 I am more equal...
I am more equal than others's picture

they flee stocks and put it in bonds - fueling yet another bubble.  Is is time for TBT?

 

Thu, 11/11/2010 - 11:06 | 719265 Oh regional Indian
Oh regional Indian's picture

Add to my gloom omen list...

a. Harbinger...dying on the vine....

b. The luck of the Irish finally runs out...

c. Rats seen jumping ship....

d. ...(still early days yet!!!)

 

ORI

http://aadivaahan.wordpress.com

Thu, 11/11/2010 - 11:08 | 719269 Bob
Thu, 11/11/2010 - 11:13 | 719292 HarryWanger
HarryWanger's picture

Pretty much playing out like I said after CSCO last night. Big drop at the open for stocks then rally throughout the day to end green. Easy as it gets.

Thu, 11/11/2010 - 11:20 | 719314 Popo
Popo's picture

Highest rate of insider selling in HISTORY... And Harry is buying.

Thu, 11/11/2010 - 11:32 | 719330 SheepDog-One
SheepDog-One's picture

Harry must be Geithner. You pukin up blood yet man?

Thu, 11/11/2010 - 11:29 | 719348 HarryWanger
HarryWanger's picture

The FED IS BUYING. Until they don't we go higher on small dips.

Thu, 11/11/2010 - 11:33 | 719367 SheepDog-One
SheepDog-One's picture

FED buying with their imaginary dollars, with no one in the world dumb enough to dump to...WOW Harry please tell me how that works out!

Thu, 11/11/2010 - 11:50 | 719423 qussl3
qussl3's picture

It's not right, its not fair, it's not natural, it's going to kill us eventually....etc

But its the path of least resistance, and if i'm trading to make a profit i'd be damnned if i let my ego get in the way.

Thu, 11/11/2010 - 11:31 | 719361 HarryWanger
HarryWanger's picture

To repeat from last night:


Bottom line, this "bullshit" can go on for years and years. Yes, it'll end in tears but you can keep this running for a couple more decades easily. With that comes rising equity prices. It's a clown show. They chase in a circle dancing wildly until the music stops. 

China has to appease the US. The US has to appease China. And no one gives a flying fuck about the rest of the world. This can go on for a very, very long time. And it will. Glad to know it probably won't happen in my life time but sucks for those who have kids.

Thu, 11/11/2010 - 11:34 | 719369 SheepDog-One
SheepDog-One's picture

'Can go on for years and years'...LOL dream on!

Thu, 11/11/2010 - 19:48 | 720672 Bananamerican
Bananamerican's picture

for "Decades"?? Why?

Because we're just QE-ing like Japan? Because we're a nation of fish eating salarymen savers and an exporting juggernaut with but a tiny military and public sector riding high in a world of easy credit and conspicuous bubble consumption??

Put down the pipe and step AWAY from the bubbles ooo0000

Thu, 11/11/2010 - 14:59 | 719944 geminiRX
geminiRX's picture

Rising commodity prices will kill this clown show. Denninger had a good piece on his site about margin compression (including Campbells soup of all things) last night that I thought was spot on. If food prices keep going north in a big way....things will get dire quickly:) Hope you own farmland

Thu, 11/11/2010 - 20:27 | 720782 sushi
sushi's picture

Man, oh man. You're saying Ballmer sold out a 1 billion position in MSFT so he could stock up on canned soup? The future is gonna be worse than I thought. May have to roll the AU over into good whiskey.

Thu, 11/11/2010 - 23:37 | 721188 Minion
Minion's picture

It should be obvious by now, the FED has two options:  monetize the defecit or the entire federal complex goes bust. 

It's either inflation or total default.  Which would you choose?  (Hint, the sheeple get more pissed when they can't even buy campbell's soup, vs. spending more and still having it on the shelf)

Thu, 11/11/2010 - 11:26 | 719300 dehdhed
dehdhed's picture

i can't distinquish any correlation in that chart except for the time they had massive buying volume spike where the market tanked shortly afterwards.  other than that it looks like flipping a coin.

Thu, 11/11/2010 - 11:28 | 719346 ptoemmes
ptoemmes's picture

Mish highlights the insider selling at Cisco.

http://globaleconomicanalysis.blogspot.com/2010/11/congratulations-to-ci...

I'm not waiting for any SEC investigations...

Pete

Thu, 11/11/2010 - 11:32 | 719365 I Am The Unknow...
I Am The Unknown Comic's picture

All that selling and still a negative effect on the VIX, which closed down significantly on 11/5 (18.26) versus prior week ending 10/29 (21.25).  So.....that tells me that the Bear-hankie put is in full force, we have clear support in the market, and insiders are profit taking coming off of earnings.  Even they are saying the markets are so fraudulent that they would rather have their money somewhere else than their own company stock.  Golly jee wiz Beaver, it looks like they're pouring money into commodities (including PM's of course).  PS I'm new to this, trying desperately to hang onto what wealth I have left, and learning quickly... so I politely ask that criticism to be constructive and educational.  Any kudos would add a warm fuzzy layer to the inside of my bag....hint hint prod prod...-

Thu, 11/11/2010 - 11:35 | 719374 Windemup
Windemup's picture

On the other hand, somebody bought those stocks.

Thu, 11/11/2010 - 11:40 | 719383 papaswamp
papaswamp's picture

Wonder if everyone should take that as hint ala Cisco which had 6 months of insider selling and no buying before their announcement of things not so peachy. Guess things aren't going to be puppydogs and rainbows elsewhere.

http://globaleconomicanalysis.blogspot.com/2010/11/congratulations-to-ci...

Thu, 11/11/2010 - 11:52 | 719436 moofph
moofph's picture

...buy! buy! buy!....wait...sell! sell! sell!...wait..um...

...RUN!! RUN!! RUN!!

...perhaps the new coke will be sucker punch flavor..."K"nocked "O"ut.

Thu, 11/11/2010 - 11:53 | 719440 Fraud-Esq
Fraud-Esq's picture

We used to call this an exit strategy. In order to exit, however, you needed volume and buyers. That this is happening with FRB action is disconcerting to say the least. 

Thu, 11/11/2010 - 12:17 | 719531 omi
omi's picture

Insiders selling is normal. They get stock options and the only way to make money from that is to exercise, get the stock and sell it. Without adjusting data for >>SCHEDULED<< option compensation this is nothing more than sensational journalism.

 

"Oh look! A convenient distraction."

Thu, 11/11/2010 - 12:36 | 719603 Printfaster
Printfaster's picture

The insider selling is what the POMOs are for, to provide the liquidity drained by the rapacious corporate executives.  There has to be money for the corporate stock buybacks.

Thu, 11/11/2010 - 13:08 | 719694 b_thunder
b_thunder's picture

Insider selling?  Cramer says "Back up the truck"

 

Thu, 11/11/2010 - 14:24 | 719838 WSP
WSP's picture

While it may be truth that insider selling is at "record levels", this should not be considered "bearish", but rather, just more of the same "money printing" and "wealth transfer".   Most likely corporations have concluded that if the government can continuously "debase" its currency by printing money, they can too.

Bottom line is I have studied the markets for decades, and find it interesting that nobody has EVER been concerned about the money printing (stock printing aka wealth transfer) of corporations.  They have always done it; however, my guess is they are just stepping up the pace now that they see the government can get away it with no real consequence.  Add to this the fact that many executives likely want to purchase more real assets to diversify away from the Ponzi fiat dollar, and all you are really seeing is just a confluence of factors leading to more money printing (via stock options) by corporations.

Nothing to see here except widespread acceptance that fiat money printing is now socially and politically acceptable and no longer considered taboo.   Moreover, corporations realize that with the Bernanke "put", they can debase their stock at an accelerated rate without worrying about its immediate effect on their stock price; afterall, fundamentals like PE, earnings, etc., no longer matter, and even if they did, corporations are not required to value their balance sheets at fair value or report honest earnings anyway, so no worries.  

At the end of the day, all this insider selling (money printing via stock options) really could be considered bullish----it means corporations feel right now is a good time to "monetize" their fiat currency (stock) in the market without fear of it hurting their stock price (and thus future money printing) too severely.

Hope this helps anybody thinking that this entire insider selling is bearish----it has been this way for decades---it is simply happening more now that corporations realize that there are no penalities in America for immoral, criminal, or corrupt behavior; provided you know the right people, illegal behavior is actually rewarded.  In other words, when you combine the fact that the government has the stock markets back with the Bernanke put, and, most investors in the market are fools anyway and don't understand how corporations "print" money via stock options for their employees, what is there to worry about?----just print, print, print.   As long as the public is willing to buy "fake" money via the corrupt stock market, corporations will be more than happy to sell you the paper----and like Benny and the Jets, they can print all day and night----so no worries, just more of the same only at an accelerated rate.   If and when (never) the public learns how to balance their own checkbooks, then you might need to be worried----in the meantime, business as usual.

 

 

Thu, 11/11/2010 - 15:11 | 719972 PositivelyNegative
PositivelyNegative's picture

Arent these same Insiders the people making the decisions to issue debt to fund massive     stock buybacks and dividends, both of which are aimed at pushing the stock price higher? Isnt this somewhat shady? Basically pillaging the companies balance sheet so they can sell their own personal stock at higher prices?? 

Thu, 11/11/2010 - 17:35 | 720403 Hunch Trader
Hunch Trader's picture

Stockholders are not acting out, so it must be OK! :D

Why bother paying dividends when you can have it all yourself without the actual owners saying a peep, or even comprehending what's happening.

 

Thu, 11/11/2010 - 17:49 | 720423 WSP
WSP's picture

Hunch Trader, you just made my day---finally, at least one human with a pulse that "gets it".

Thu, 11/11/2010 - 23:24 | 721152 Buck Johnson
Buck Johnson's picture

They even made comment about the insider selling on CNBC, and the market has been down a few days.  I think they know the plug is about to be pulled and they are running like crazy.

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