Corporate Insiders Buying More Than Usual

Vickers Weekly Insider Report finds that the trailing eight week ratio of corporate selling to buying is now at 1.4 to 1. In other words, insiders on average are buying 1 share for every 1.4 they sell. Sounds bad? Not exactly. Traditionally, insiders do much more selling than buying, so any ratio below 2 (2 sells for every 1 buy) is considered bullish. As reported at MarketWatch, the last time the ratio got this low was in November 2002, near the end of the 2000-2002 bear market. Of course, the market did not really begin increasing until March 2003, and it had some catalyst with the military operations occurring at that time. Therefore, while the insider buying numbers appear good, the market bottom may last longer than expected, and may also need a catalyst to help it finally reverse course.