Sell Signal?

Insiders, on balance, always sell more shares than they buy because they receive so much stock through employee compensation and bonus plans. The Thomson Reuters Insider Transaction Ratio considers it bullish when company officers and 5%-plus holders, as a group, sell less than 12x the dollar amount that insiders are buying. When that ratio exceeds 20:1, it is considered to be bearish, signaling widespread distribution.

This indicator has proven fairly accurate, looking out weeks to months but it is too volatile for longer periods. I matched up the past 12-month signals to the movement of the SPDR S&P 500 (SPY) to illustrate where it went right and wrong....244 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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