Sunday, November 7, 2010

Key Indicator For Investors In 4th Quarter Says El Foldo

Sell-to-buy ratio skyrockets nearly 100 percent in past week, nearly triple for key executives classed as insiders, says securities analyst

New York – Some indicators are impossible to ignore when it comes to trading securities.

In this downtown crap shoot, the way the bones are rolling lately, it's not a good bet to put the dough on the long come line.

During the past week, according to published reports, insider trading sell-to-buy ratio nearly doubled from 1,411:1 to 2,341:1.

According to an article by securities analyst Alan Newman, “The overwhelming volume of sell transactions relative to buy transactions by company insiders over the last six months in key leading sectors of the market is the worst...ever.”

In an article prepared for MSNBC, Mr. Newman said “industry leaders” have racked up a ratio of 3,177:1.

Tracking the largest companies in three of the most important leading industrial sectors, the article went on to say that the sell-to-buy ratio calculation is based on the fact that key executives classified as insiders have sold more than 120 million shares of stock over the last six months. They bought only 38,000 shares, which results in the drastically lopsided ratio.

The buyers aren't letting it ride.

Driven by “robo-trading” programs, analysts have timed the trades as so rapid that in 70% of transactions, there is an average of only 11 seconds in duration of the time that the purchaser held the shares.

In a classic example of infra-dig in the dialect of high glaze, Mr. Newman, who is acknowledged as an expert on insider trading, rebopped the bebop by saying, “At the risk of sounding like a broken record, we expect a significant correction.”

Amen, brother.

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