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  • Bob Brooks

A Bad Sign for the Stock Market?

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There are a ton of indicators that you can follow that will act as predictors for the stock market. One of those is insider sellers. First, it is important to have an understanding of the definition of an insider.  

An insider is one who has closely held knowledge of the health of a company that the public doesn't have. Thus, the reason for the term "insider." For example, let's suppose a corporate executive or insider that works for Apple sees some things they don't like about the future profitability of Apple that could negatively effect the future price of the stock. If they own a great deal of Apple Shares, then they might be motivated to sell those shares based on that information.

Wall Street watches very carefully the behavior of insiders when it comes to their company stock because they know their company's future better than anyone. Are the insiders buyers or sellers of the stock?

This past February, corporate insiders were sellers of corporate stocks according to one credible indicator. In fact, the selling was the most in a decade. What do corporate insiders not like about the market that is causing them as a whole to sell?

These signs might be nothing. However, it make sense to pay attention and not ignore them. Know your risk level and be comfortable with it.  

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