Chart Of The Week: This Is Who Is Selling

Tyler Durden's picture




 

As we have pointed out before, the ongoing market tension is so palpable it can be cut with a knife. As a reminder, institutional investors are now about as "all in" as they can be, spinning narratives about economic growth, housing bottom, and general improvement (despite all facts to the contrary), while waiting for one simple thing: to get retail investors buying again. Because unless the Fed or ECB pumps another trillion or so in new liquidity there is simply no new purchasing money. However, as we have shown time and again, retail investors have had it with stocks, and are dumping domestic equity funds hand over fist despite the near vertical equity ramp fest, while money going into ETFs, that traditional straw man used by fund flow apologists, has been going almost exclusively into bond-related vehicles. Yet one group of investors has not been waiting to find out which way this temporary stalemate will end (because either the buyers' money will end first, or retail will throw in the towel and after a 20% artificial, liquidity-driven move to the upside will capitulate and become the latest bagholder). That group is corporate insiders: the people who know the fundamental prospects of their companies better than anyone, and certainly better than the propaganda media or the always wrong Wall Street sell side analyst brigade. And as the chart below demonstrates, insiders are now out and selling in record quantities.

Chart: Bloomberg

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Sun, 04/01/2012 - 12:03 | 2307625 donsluck
donsluck's picture

SELL!

Sun, 04/01/2012 - 12:18 | 2307650 Fukushima Sam
Fukushima Sam's picture

Probably just the founders of Groupon and LinkedIn cashing out.

Sun, 04/01/2012 - 12:34 | 2307682 Oh regional Indian
Oh regional Indian's picture

I know what is happening.

They are freeing up money for the FaceHook EyePeeO.

feels like Facebook is the Final Ponzi Hogfest. So Secret.

ori

/chilling-silence-from-san-onofre

Sun, 04/01/2012 - 12:38 | 2307702 economics9698
economics9698's picture

Insiders are selling at a 8-1 pace.  Normal is 2-1.

Sun, 04/01/2012 - 12:54 | 2307733 ZeroPower
ZeroPower's picture

What are you even comparing?

Insider selling will always be much larger than insider buying since most firm's allocated bonuses are in the form of stock options.

How does an executive get his payout? By selling.

Sun, 04/01/2012 - 12:58 | 2307742 Sean7k
Sean7k's picture

But if they believed in equities, they would be diversifying into other equities, offsetting the sell chart. They are taking their money and going to other markets. The comparison has value.

Sun, 04/01/2012 - 13:30 | 2307799 ZeroPower
ZeroPower's picture

What??

Unless theyre a board member of the other company, then NO, this would NOT offset the chart. Insiders, remember.

Its the kind of (non-) thinking you've demonstrated which just goes to show how easy it is to confused the masses.

Sun, 04/01/2012 - 13:50 | 2307832 AccreditedEYE
AccreditedEYE's picture

How is it that Sean has a +6?! People, Zero is right. The main point of the post "Who Is Selling" is showing us Insiders (i.e. people who are executives and high level employees) are selling into the market rally as the Bob Doll's of the world continue to pimp equities to retail. These are people filing with the SEC to sell. There is NO WAY IN HELL their buying other stocks in the broad market would offset the chart... fuck, that's not even the point anyway. Get educated about this shit before posting a comment.  

Sun, 04/01/2012 - 18:01 | 2308167 economics9698
economics9698's picture

You win the fight.  Next.

Sun, 04/01/2012 - 14:16 | 2307860 Sean7k
Sean7k's picture

 "The inside Track, Commentary: Corporate insiders are betting this is a correction," which suggests that insiders are taking a renewed interest in buying shares of their stock.

One of the most bearish omens on Wall Street is for corporate insiders, in the face of a market decline, to accelerate the selling of their companies’ shares.

That would mean that they have no confidence that those shares will recover any time soon and have decided to unload their shares, even at depressed prices.

That’s why analysts have been paying close attention to insider behavior since the stock market began correcting in mid January.

Fortunately for the bulls, they did not sell more stock into that decline. On the contrary, recently released data show that insiders have not only cut back on their selling, but also increased the pace of their buying.

This suggests that they believe that their companies’ shares will soon be going back up in price…

For the week ending Jan. 15, for example, which was the week in which the stock market hit its high, this sell-to-buy ratio was 5.15-to-1, which meant that insiders that week were selling more than five shares for every one that they were purchasing.

For the week ending Feb. 12, in contrast, according to the latest issue of Vickers Weekly Insider Report, the ratio was less than half as high, at 2.42-to-1.

Because of this marked improvement in the sell-to-buy ratio, David Coleman, Vickers editor, views "the recent downturn as likely being only a near-term correction. We remain cautious, but are increasingly optimistic about the future performance of the overall markets."

Sun, 04/01/2012 - 14:34 | 2307892 AccreditedEYE
AccreditedEYE's picture

Thank you for regurgitating the ever-bullish propaganda from Marketwatch on our hallowed ZH pages.... GREAT.. ancient February data. Do you know what the date is today? Did you expand the chart Tyler put up?

Sun, 04/01/2012 - 14:44 | 2307914 Sean7k
Sean7k's picture

Seeking Alpha. The post answers a response with a valid example. Can you do the same or just post insults?

Sun, 04/01/2012 - 16:02 | 2308038 Western
Western's picture

Thank you for regurgitating the ever-bullish propaganda from Marketwatch on our hallowed ZH pages.... GREAT.. ancient February data. Do you know what the date is today? Did you expand the chart Tyler put up?

 

...hmmm, nope no insult there.

 

the only thing close might be "regurgitation", and even then.. lol

Sun, 04/01/2012 - 16:18 | 2308051 ZeroPower
ZeroPower's picture

Yes, with research from a scholarly article:

We examine insider trading activities of all companies traded on the NYSE, AMEX, and Nasdaq during the 1975-1995 period. In general, very little market movement is observed when insiders trade and when they report their trades to the SEC. Insiders in aggregate are contrarian investors. However, they predict market movements better than simple contrarian strategies. Insiders also seem to be able to predict cross-sectional stock returns. The result, however, is driven by insider's ability to predict returns in smaller firms. In addition, informativeness of insiders' activities is coming from purchases, while insider selling appears to have no predictive ability.

 

Link http://rfs.oxfordjournals.org/content/14/1/79.short

Sun, 04/01/2012 - 18:45 | 2308222 sitenine
sitenine's picture

I call irrelevant.  That was written in 2001 - before CDS even existed, before the sheople woke up to the housing bubble, before the now famous market meltdown, before technocrats, before QE infinity...  I believe you can do better than that zero.

Sun, 04/01/2012 - 17:40 | 2308139 Kayman
Kayman's picture

ZeroPower

If you are selling your shares, then you believe they are worth more in today's cash, than tomorrow's capital gain.  Your argument is all sound.

Sun, 04/01/2012 - 22:09 | 2308640 StychoKiller
StychoKiller's picture

Sound as in "well-established" or sound as in "noise?"

Sun, 04/01/2012 - 14:25 | 2307873 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Insiders in a Ponzi win by getting out of town before the pitchforks show up at their doors.

Sun, 04/01/2012 - 16:44 | 2308081 dogbreath
dogbreath's picture

at the market high

Mon, 04/02/2012 - 06:55 | 2309095 defn8Dog
defn8Dog's picture

And just who is buying? Wait for it .... the same companies whose insiders are selling! hahahahahahha

Sun, 04/01/2012 - 17:57 | 2308160 knukles
knukles's picture

Oh, you mean that SitOnMyFacebook?!?!
Where you get to vote like or dislike your STD's?
My scab's bigger then you scab?

Sun, 04/01/2012 - 18:11 | 2308191 max2205
max2205's picture

Every buyer there a seller. Not until they ban naked shorts and naked longs. Yes there are naked longs too that didn't buy from anyone.

Sun, 04/01/2012 - 19:02 | 2308239 Stax Edwards
Stax Edwards's picture

A 'naked long' is a foreign concept for me unless you are simply talking about a derivative.  WTF? Like if a market maker cannot secure the shares of something illiquid but sells them to you and becomes short?

Also how is this nefarious?

Sun, 04/01/2012 - 20:14 | 2308332 banksterhater
banksterhater's picture

it's Farcebook

Sun, 04/01/2012 - 15:03 | 2307942 Common_Cents22
Common_Cents22's picture

GRPN is having a half off sale soon!  They'll make it up in volume ;)

Sun, 04/01/2012 - 15:30 | 2307996 I am Jobe
I am Jobe's picture

U forgot Salesforce.

Sun, 04/01/2012 - 12:27 | 2307661 TruthInSunshine
TruthInSunshine's picture

The relationship between insider selling and the indexes has been anything but correlated for a while now, in what are obviously rigged markets. Draw your own conclusions about the whys and hows. Do I think this is normal and sustainable? Hell no. I think we are now in one of the biggest equity bubbles in history (that happens to coincide with one of the biggest simultaneous bond bubbles; that's a neat trick, and tells one just how massively distorted and broken markets are, thanks to unprecedented central fractional reserve bankster fiat games).

 

On another subject:  In Britain, V For Vendetta/1984 isn't just fiction anymore, but reality, officially admitted by the British Government. All the searches, texts, emails, phone calls and any other communications of British Citizens are now available in real time, with identifiable personal information, without any requirement for a warrant or any other restriction, to the government. This is already in place in China, Russia, The United States (even if denied), so happy surfing everyone! You're now presumed guilty and subject to bein surveiled at all times and without any need for cause:

 

UK 'to announce' real-time phone, email, Web traffic monitoring

By | April 1, 2012, 3:35am PDT

Summary: UK government plans to allow the intelligence services analyse call, email and Web traffic in “real-time” could be announced by the Queen as early as May.

Editors note: Despite this being April 1, or ‘April Fools Day’, this story is not a fabrication nor a joke. For background to this story, head this way.

Under new UK legislation, Internet service and broadband providers will be obligated to pass personal browsing, email and call data to the intelligence services for real-time processing.

 

“Internet firms” could also include social networks and search engines, such as Facebook, Twitter, and Google — all of which have a presence in the UK — along with broadband providers. Access to ISP logs will be opened up to the government on-demand.

 

New snooping law to allow Government access to everybody's emails, texts, and ...
  • Daily Mail - ‎37 minutes ago‎

By Lyle Brennan

Major changes to surveillance laws are to give the Government the power to monitor email exchanges and website visits of every person in the UK. The new legislation is expected to be announced in the Queen's Speech next month.

 

Sun, 04/01/2012 - 12:41 | 2307707 LowProfile
LowProfile's picture

Not to pick a fight, but...

The relationship between insider selling and the indexes has been anything but correlated for a while now,

Looks to me on the above chart that since 2010, a peak in IS like this precedes a big selloff by about 2-6 months.

Sun, 04/01/2012 - 13:29 | 2307757 TruthInSunshine
TruthInSunshine's picture

Your caveat was unnecessary; 'tis Fight Club.

I have seen inflow/outflow and insider buying/selling charts posted here and elsewhere (TrimTabs has been posting much of the data) for YEARS (not months) now, whereby the ratios have been historically out of whack. We are talking ratios of 200+ shares of stock held by insiders sold for every one share purchased, etc. more than a year ago (I believe there was an all time high reached in this ratio of 385 to 1 back sometime in late 2010 or early 2011), and the markets have continued upwards, a few pullbacks included.

Do I think this will continue?

No.

Do I think it could continue for at least moderately longer?

Sure.

Do I want to try and time it, throwing good money down on my prospects of being able to gain some of what might be a continued upward gain in already insanely stretched valuations, thinking that I can get out before one or many of those "it blew right through the stops and gapped down 20% or 30% before the 'market makers' caught my loss bid" days revisits us?

HELL NO.

I personally think that there really is demand destruction in the real economy taking place right now thanks to many factors, including the loose, pedal to the metal monetary policies of central bankers, and that the deficit spending to the sky days will be necessarily limited, and that we're closer to the when moment now than we were two or three years ago.

I think that the real objective is to keep everything from literally falling apart at the seams before November, if they're able to pull if off (which is a big if).

I am certain we are going to experience one of the biggest meltdowns in risk assets in history shortly, and moreover, I am certain that we are going to experience one of the biggest meltdowns in formerly thought to be risk-off bond markets shortly, since both are trading at levels only made possible by an additional trillions of central bank fiat flooding the globe in the last three years.

I am unsure as to whether these two periods will intersect, and if they do, what that will look like precisely. If they do, and the more they overlap, it will be a generational event.

I have never been more certain we're on the cusp of historic economic (and maybe political) degradation, that those with eyes and ears open, using critical analysis, can already see it happening and setting in, despite the misleading (some would argue propagandist) MSM headlines, and that there's an ominous, outsized event that lay ahead (even if I or one can't describe what it will look like or what shape it will form, nor its precise consequences) that is at least equal to the outsized manipulation and distortion caused by central fractional reserve bank monetary policy and outsized government regulatory and fiscal policy missteps, in the aggregrate, of the last 30 years.

Sun, 04/01/2012 - 13:53 | 2307835 LowProfile
LowProfile's picture

I don't trade (anymore).  But I follow stocks because a big selloff in them usually coincides with a dollar rally, and subsequent PM buying opportunity.

It's all the same trade, but having a time frame helps.

Sun, 04/01/2012 - 14:58 | 2307940 css1971
css1971's picture

I don't see how stock and bonds can both melt down simultaneously. Bonds are much bigger, when they go, everything else will take off like a rocket... (we may well be seeing the end of the bond bubble right now) in nominal terms. In reality it's nothing more than inflation, hard assets will be the real things to hold.

Oh and it will take longer than everyone thinks. Years.

Sun, 04/01/2012 - 15:05 | 2307944 LowProfile
LowProfile's picture

 

I don't see how stock and bonds can both melt down simultaneously.

Easy, the money can go into 1. Cash, 2. Extinguish debt, 3. RE or my favorite, 4. Commodities.

Sun, 04/08/2012 - 09:47 | 2326020 Imminent Crucible
Imminent Crucible's picture

It's easy for stocks and bonds to plummet simultaneously--it just happened in Europe. It happens when artifically pumped-up bond values collapse; the bonds are dumped at big losses, and there is no resultant tidal wave of cash to lift stocks.

If you pull the plug in your bathtub, does the water level rise in your toilet?

Sun, 04/01/2012 - 15:12 | 2307956 TruthInSunshine
TruthInSunshine's picture

css1971

 

First, stocks and bonds can melt down simultaneously if the great margin wave washes over the 'investors,' given the leverage in the system, and that liquidity has to be raised from every asset class in order to pay Mr. Margin, who waits for no one.

Second, I have no idea as to that which I referred to as an ominous cloud on the horizon (not some ubiquitous notion, but something that facts and data can highlight as being probabilistic) will lead to a precipitous drop off a cliff's edge or a slow spiral into the chasm (given the greater depths, lengths and size of the interference with normal market mechanisms that central planners have used - blowing bubbles for 30+ years now to keep the house of cards from collapsing, I'm inclined to go with a boil of the frogs scenario, because they're going to lose control).

Sun, 04/01/2012 - 15:35 | 2308006 fonzannoon
fonzannoon's picture

Even the Main stream idiots Friday on CNBS were admitting as the bond market was selling off that the money was not going into equities. They said it was going to cash. PM's were also up.

Sun, 04/01/2012 - 19:37 | 2308286 Founders Keeper
Founders Keeper's picture

[I'm inclined to go with a boil of the frogs scenario...]---TruthInSunshine

Is it getting hot in here...?

 

Sun, 04/01/2012 - 13:50 | 2307830 scatterbrains
scatterbrains's picture

Looks likes every time the fed announces a new print fest insiders dump stocks hand over fist in ever larger amounts into the feds coat tails. The question is if this is all by design. Are the .01%'ers owning/controlling/using the fed to escape the collapse of the USA ?  Watch gold for further clues.

Sun, 04/01/2012 - 16:39 | 2308073 Oracle of Kypseli
Oracle of Kypseli's picture

I am not sure that's right as I think that Bernanke's wet dream is to get the masses to buy stocks and houses.

Sat, 04/14/2012 - 19:52 | 2345848 MeelionDollerBogus
MeelionDollerBogus's picture

That's just a means to an end.

You come to me without 'why' ?

http://youtu.be/E_PFZ92dMys?t=5m10s

The end is the bankruptcy of the lower classes & the expanding influence of the ruling class. Whatever else may happen in the middle, from parasitic enrichment to civil wars, is of no consequence to the mobile global elite who are always very well armed with every itinerary stop very well stocked.

It is the centuries-long dance.

Sun, 04/01/2012 - 12:43 | 2307711 espirit
espirit's picture

No doubt these markets are broken.  Consider what companies are doing with the hoards of cash stashed, it's not expansion but stock buybacks thus to keep the the liquidity ponzi going.  Distribution to executives and subsequent sale of shares keeps the circle jerk intact, and provides hopium to the average investor class.

Sun, 04/01/2012 - 13:10 | 2307762 TheFourthStooge-ing
TheFourthStooge-ing's picture

TruthInSunshine said:

On another subject:  In Britain, V For Vendetta/1984 isn't just fiction anymore, but reality, officially admitted by the British Government. All the searches, texts, emails, phone calls and any other communications of British Citizens are now available in real time, with identifiable personal information, without any requirement for a warrant or any other restriction, to the government. This is already in place in China, Russia, The United States (even if denied), so happy surfing everyone!

Dependence upon technology always brings unintended consequences and unanticipated vulnerabilities. I look forward to the development of the online/digital equivalent to Gatso vandalism:

http://www.speedcam.co.uk/gatso2.htm

 

Sun, 04/01/2012 - 14:02 | 2307851 Bartanist
Bartanist's picture

One day the people serving Satan will wake up to understand who they serve and why. It just takes time and then they will have a choice.

I cannot blame someone who is clueless, no more than I can blame a puppy dog or a kitty. However, with knowledge comes responsibility and a choice that MUST be made.

There is no going back to ignorance.

Sun, 04/01/2012 - 15:38 | 2307863 TruthInSunshine
TruthInSunshine's picture

Here's another example of what's becoming daily drivel reflecting how desperate the financial/Wall Street Ponzi is to get retail suckered into the game: 

For stocks, a stable and impressive climb in 2012

The Associated Press‎ - 1 day ago

"I don't think anyone could have predicted this," says Chip Cobb, a senior vice president at Bryn Mawr Trust Asset Management. For these gains, he says, "I thought it would take all year."

The jump gives money managers like Cobb hope that ordinary folks burned by two deep bear markets in a decade will start buying again, propelling the indexes even higher.

In a remarkable act of self-restraint — or foolishness, depending on your view — they have mostly stayed out of the market. One reason they may jump in now is that fear of looming disasters, like a full-blown debt crisis in Europe or a second recession in the United States, has faded.

 

1)  "Ordinary folks"  - who according to the writer's own quote "have been burned by two deep bear markets in a decade" - are foolish to avoid what is clear as being a total and complete Ponzi. Epic.

2) The looming disasters of a full-blown debt crisis in Europe or a second recession (let alone Depression) in the United States have faded. ORLY?  Epic again, FTMFW.

I could propagandize far better than this horseshit. Where do they pick these scab writers up? 

 

STOCKS AT NOMINAL LEVELS OF 14 YEARS AGO & 40% LOWER IN REAL TERMS [NOT INCLUDING MASSIVE LOSSES DUE TO SURVIVORSHIP BIAS OF STOCKS THAT WENT TO $0 - E.G. GM - AND INDEX RE-JIGGERING], AND JUST COMPLETED ONE OF THE BIGGEST BEAR MARKET RALLIES ON A BUBBLE-LICIOUS BERNANKE PRINT-A-THON OF FIATSKI IN HISTORY, SO JUMP ON IN, BECAUSE IT'S A PERFECT TIME TO TAKE AND BE TAKEN FOR A PLUNGE, BITCHEZ.

Sun, 04/01/2012 - 15:39 | 2308009 nothing can go wrogn
nothing can go wrogn's picture

They're trying to lure the muppets back in to the honeypot. It's not working though.

It must be driving them mad! A few short years ago all it took was some simple market cheerleading to unload a bunch of shit.

Sun, 04/01/2012 - 15:13 | 2307966 Real Estate Geek
Real Estate Geek's picture

Opt out from the monitoring.

http://vpnreviewz.com/

 

Sun, 04/01/2012 - 15:55 | 2308026 cosmictrainwreck
cosmictrainwreck's picture

THANKS for the link

Sun, 04/01/2012 - 20:56 | 2308432 Cathartes Aura
Cathartes Aura's picture

ahhahahhahhahahhhahHAH!!

that you managed to work this gem of a website into this particular thread just exposes the genius that you are:

This closeup shows it was burnt to a crisp.

UPDATE - Like all vandalised Gatsos in the area it was replaced shortly afterwards but the new camera has since been blown up using dynamite, see below.

several shades of brilliant this is - thanks!!!

Sun, 04/01/2012 - 14:24 | 2307869 Curt W
Curt W's picture

Plus if they suspect anything about you they can listen to you through your cellphone even when you are not making a call.

Sun, 04/01/2012 - 15:45 | 2308017 harmonymonkey
harmonymonkey's picture

 Incredible.  Can you provide a source?

Sun, 04/01/2012 - 15:56 | 2308030 cosmictrainwreck
cosmictrainwreck's picture

common knowledge; no source required (except maybe for microscopic technical details)

Do NOT follow this link or you will be banned from the site!