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Alternative Market Briefing

Insider selling approaching panic level

Wednesday, February 22, 2017

Matthias Knab, Opalesque:

Jeff Seymour, Engineer. Investment Advisor. Greedometer algo inventor, writes on Harvest Exchange:

The past 7 weeks (first 7 weeks of this year) have seen insiders selling 5.5X as many shares as they bought. This is high enough & long enough that this data stream on its own should get your attention. I don't rely solely on this data stream, but it is an input parameter in the Greedometer as well as mini Greedometer algorithm.

Insider sells to buys is a helpful data stream but it is buggy. Sometimes it takes 3 weeks of elevated selling to get your attention like the 3 weeks immediately prior to the May 6th 2010 flash crash when insiders panic dumped shares at a blistering yet quiet 8.1 pace of shares sold to bought. Clearly someone knew something bad was about to play out. Just not you. (Yeah, some dude in his parent's basement in London caused the flash crash...) Sometime its takes 7 weeks to get your attention like when the opening 7 weeks of 2007 saw insiders dump shares at a 6.7 pace.

I suspect we'll see insiders quietly continue to dump their shares this week and next, and that we'll see the first 9 weeks of this year average close to 6X shares sold vs bought. FYI, 2007 saw insiders dump shares at a 6.1 pace for the first 9 weeks. The SPX would oscillate sideways until October that year. T......................

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